OCALA, FL (352today.com) – When businesses apply for financing, lenders consider more than just numbers on a balance sheet. Two of the most important factors in determining whether a loan is approved – and on what terms – are collateral and conditions.
Collateral refers to the assets a borrower pledges to secure a loan. This could include equipment, inventory, real estate or accounts receivable. While not every loan requires collateral, offering it can strengthen an application and lead to better terms.
“Think of collateral as a safety net,” said Nick Blaser, president of Cogent Bank’s North Central Florida market. “It shows commitment from the borrower and provides confidence for both sides of the deal. It’s not about mistrust, but about creating stability if unforeseen challenges arise.”
Conditions on the other hand, focus on external factors that influence repayment ability and long-term success. Lenders weigh the purpose of the loan, industry trends and the overall economic environment when structuring financing. Seasonal influences and regulatory changes may also play a role.
“Conditions give context,” Blaser said. “We ask why the business is borrowing now, whether the industry is growing or contracting, and how shifts in the economy could impact operations. Those details help us structure loans responsibly, so businesses are set up to succeed.”
For entrepreneurs considering a loan, understanding collateral and conditions can make the process less daunting and more strategic. Collateral can increase confidence and open the door to better terms, while being mindful of conditions ensures the loan aligns with current realities and future plans.
These two considerations are part of a broader framework often referred to as the “Five C’s of Credit,” which also include character, capacity and capital. Together, the Five C’s provide a well-rounded picture of risk and opportunity.
Blaser noted that few borrowers excel in every area, but the balance of all five factors is what guides decision-making. “It’s the full picture that matters,” he said. “We evaluate strengths and weaknesses across each of the C’s to understand fit, not just to check boxes.”
For lenders like Cogent Bank, the approach is also rooted in relationships. By combining local expertise with flexibility, the bank aims to tailor financing to fit each client’s goals rather than applying a one-size-fits-all model.
“Business lending isn’t purely transactional,” Blaser said. “It’s about building long-term mutually beneficial relationships. When we take time to understand both the numbers and the bigger picture, we can deliver financial solutions that genuinely help businesses grow, and business owners achieve their personal financial goals.”