Page 168 - TESIS ADJUNTA DE BUSINESS
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CREDIT CYCLE
Credit is a privilege which permits a product to be acquired first and
paid for later.
BASES FOR A CREDIT
Credit concessions are made on the bases of economic solvency or a good
credit standing. This solvency however is based on three basic concepts
which will determine quieter a person or company is to be given a credit
CHARACTER
Character or moral solvency is a guarantee that a debt will be paid,
character is a synonymous which reputation, honor, or business tact and
this is the most important factor to consider when giving credit.
CAPACITY
This factor also guaranties the payment of a debt since it shows that
the individuals who are applying for credit have the knowledge,
experience, and talent to make a business prosper.
CAPITAL
This element is the third on the list but is just as important as the
others. Capital is the ultimate guarantee and can include money in a
bank or equipment.
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