How do lenders evaluate business creditworthiness?

Lenders assess five factors: credit score (personal and business), cash flow (can you service the debt?), collateral (what secures the loan?), capital (how much are you investing?), and conditions (why do you need the money and what is the economic environment?). Cash flow coverage is increasingly the primary factor — lenders want to see monthly cash flow 1.25x or greater than debt payments.