The 5cs of credit resulted in this situation are Character, Capital, Capacity,

Collateral, and Conditions are the five Cs of credit. Credit ratings are used by
financial institutions to measure and judge if an applicant is creditworthy, as
well as to set interest rates and credit limitations for current borrowers. As for
this situation, Mr. Joe Salazar's disposition shows his keenness to repay the loan
in behalf of his business. Through examining Joe's Restaurant's payment history and
company experience, the results are not bad and it shows that Joe was able to run
his restaurant business effectively for 12 years. For the Capital, it is assessed
by the total pool of assets held in Joe's Restaurant. Banks are more willing to
lend to business owners who have put some money into the firm themselves. So in
Joe's case, it demonstrates that he has some "skin in the game" or involved in
achieving a goal. . Next is the Capacity which is the ability of the lender to
repay the loan. This includes the borrowing and repayment history of the lender. In
this case, even though Joe had some late payments in the past, he was able to pay
for the penalties with a valid reason so in my opinion, Joe is trustworthy. For the
collateral, these are the assets that are used to guarantee a loan wherein it is
used as a backup source if a borrower is unable to repay a loan. Joe's collateral
to the bank was the lot where his main restaurant is. This is a good thing because
Joe's willingness to pledge a collateral reduces the risk to the lender including
that he pledge the lot of his MAIN branch. For the last one which is the Condition,
this is an addition in evaluating the borrower's financial conditions in which
lenders consider other financial factors such as the economy's overall health and
the loan's specifics. Conditons are important because banks like to lend to
businesses that are operating in favorable conditions in order to ensure that loans
are repayed. They want to be able to recognize dangers and protect themselves
accordingly. In my opinion, having 3 branches that is still earning and groving
even more plus a net income of Php900,000 per year is considered for Joe to be able
to repay the loan in time so I think the bank would accept Joe's application of
Php1.5 million loan.

Consideration:
The ability of Mr. Joe Salazar to create cash flow in order to service the loan's
interest and principal is often regarded as the most essential factor. Applicants
who score well in each category, on the other hand, are more likely to acquire
larger loans, cheaper interest rates, and more favorable payback conditions.