CLFP - Credit Process and Financial Statement Exam Questions with Verified Answers Latest Update
2025 Graded A+
What applicant attributes are you trying to learn about when underwriting a deal? - Answers 1.) The
desire to repay the debt
2.) the financial ability to make payments
3.) The reserves to withstand unexpected setbacks
What are the four (4) C's of Credit? - Answers 1.) Character: the desire to pay back debt
2.) Cash Flow: Ability to make payments
3.) Capital: Ability to withstand setbacks
4.) Collateral: Ability to liquidate to recover investment when the initial three (3) C's fail
What are common credit criteria in the app only process? - Answers 1.) TIB
2.) Industry
3.) Equipment type
4.) Bank Balances
5.) Personal Credit Reports
6.) Business Credit Reports
7.) Landlord rating
8.) Vendor quality
9.) Lease structure
10:) New/Used equipment
11.) Equipment location
12) Comp credit
13) SOS
14) References
Characteristics of App Only? - Answers 1.) limited upfront information (application)
2.) low-touch, high volume
, 3.) Credit scoring
What are common credit criteria of mid ticket credit process? - Answers 1.) TIB
2.) Principal's credit
3.) deal structure
4.) equipment type
5.) 2-3 years financial analysis (statements)
6.) background check
7) trade & bank references
How does Entity type impact underwriting? - Answers 1) different credit risks/considerations
2)different legal risks/considerations;
3) different documentation requirements
Describe a Sole Proprietorship? - Answers 1.) An individual who owns a business
2.) No legal requirements apart from business license
3.) Typically DBA or "doing business as"
4.) Don't file separate tax returns - 1040 Schedule C
5.) Tax Return: Income reported before owner draw/taxes
6.) Cash flow: income after tax and draw
Describe a Partnership? - Answers 1) Two or more people doing business documented with Partnership
Agreement
2.) Separate financial & tax statement
3.) Income is generally reported prior to draw/tax
4.) Profits/Losses distributed to partner in accordance with agreeemnt
What is General Partnership? - Answers Partnership with two or more people/entities each of which is
legally liable for business.
What is Limited Partnership? - Answers Partnership with two or more people/entities with at least one
General Partner and the others Limited Partners. General Partners are liable for all company activities.
Limited Partners liability is limited to their investment.
2025 Graded A+
What applicant attributes are you trying to learn about when underwriting a deal? - Answers 1.) The
desire to repay the debt
2.) the financial ability to make payments
3.) The reserves to withstand unexpected setbacks
What are the four (4) C's of Credit? - Answers 1.) Character: the desire to pay back debt
2.) Cash Flow: Ability to make payments
3.) Capital: Ability to withstand setbacks
4.) Collateral: Ability to liquidate to recover investment when the initial three (3) C's fail
What are common credit criteria in the app only process? - Answers 1.) TIB
2.) Industry
3.) Equipment type
4.) Bank Balances
5.) Personal Credit Reports
6.) Business Credit Reports
7.) Landlord rating
8.) Vendor quality
9.) Lease structure
10:) New/Used equipment
11.) Equipment location
12) Comp credit
13) SOS
14) References
Characteristics of App Only? - Answers 1.) limited upfront information (application)
2.) low-touch, high volume
, 3.) Credit scoring
What are common credit criteria of mid ticket credit process? - Answers 1.) TIB
2.) Principal's credit
3.) deal structure
4.) equipment type
5.) 2-3 years financial analysis (statements)
6.) background check
7) trade & bank references
How does Entity type impact underwriting? - Answers 1) different credit risks/considerations
2)different legal risks/considerations;
3) different documentation requirements
Describe a Sole Proprietorship? - Answers 1.) An individual who owns a business
2.) No legal requirements apart from business license
3.) Typically DBA or "doing business as"
4.) Don't file separate tax returns - 1040 Schedule C
5.) Tax Return: Income reported before owner draw/taxes
6.) Cash flow: income after tax and draw
Describe a Partnership? - Answers 1) Two or more people doing business documented with Partnership
Agreement
2.) Separate financial & tax statement
3.) Income is generally reported prior to draw/tax
4.) Profits/Losses distributed to partner in accordance with agreeemnt
What is General Partnership? - Answers Partnership with two or more people/entities each of which is
legally liable for business.
What is Limited Partnership? - Answers Partnership with two or more people/entities with at least one
General Partner and the others Limited Partners. General Partners are liable for all company activities.
Limited Partners liability is limited to their investment.
