5 c's of credit Case study for Financial Administration.-

 

Dora and her husband Jack have owned their business for over 3 years now and they are
looking to expand its operations to Edmonton , Alberta. They are in the construction business
and have landed a contract to build homes for senior citizens, a project that will give them at
least 25 million dollars in revenue for the year 2024 . 

They have come to see you at the bank for a business loan to support the company's growth as
they need a line of credit for 3MM million dollars . Dora and Jack are seasoned professionals
and have managed their affairs in a very good manner their personal and business accounts
balances are as follows

Dora and Jack Personal net worth
Own their house in Calgary is worth 3.5 Million dollars with no mortgage on it . Savings in RRSP
1.5 Million dollars approximately 500k in their checking account and own two rental properties
worth 2 million each. Vehicles are paid for and worth 100k each (2)
Line of credit for 500k with TD (unused ) credit cards paid every month , very good savings
habits and Jack has mentioned they are the recipients of a 18 million dollar inheritance that will
just arrive in the following month. Dora credit score is 850 and Jack 895 they each pay
themselves a salary of 200K a year.

Business balance sheet is healthy , after 3 years of operation the company is clearing about 17
million dollars in revenue , business debts are 1.5MM million dollars and their A/R is always
paired every 30 days .
No additional concerns have been identified by you . Only thing that is left to do is utilize the 5c's
framework plan to assess their creditworthiness and accept or decline this request.