Resume Wizard - Colorado FFAffa.cccs.edu/wp-content/uploads/2015/02/The-5-cs-of-cre… · Web viewNow perform a round robin, When I say SHOUT IT OUT, we will begin eliciting responses

Junior and Senior level Ag Bus.

Colorado Agriscience CurriculumSection: Advanced Agribusiness

Unit: Agricultural Business Records

Lesson Title: The Five C’s of Credit

Colorado Ag Education Standards and Competencies

AGB11/12.03 - The student will be able to formulate and analyze financial records and use the information for evaluation and planning.

Understand the 5 c's of credit.

Colorado Model Content Standard(s):

English Standard 1: Students read and understand a variety of materials.

English Standard 2: Students write and speak for a variety of purposes and audiences.

English Standard 3: Students write and speak using conventional grammar usage, sentence structure, punctuation, capitalization, and spelling.

English Standard 4: Students apply thinking skills to their reading, writing, speaking, listening, and viewing

English Standard 5: Students read to locate, select, and make use of relevant information from a variety of media, reference, and technological sources.

Student Learning Objectives:

1. Students will be able to identify the 5 c’s of credit with 100% accuracy.

Time: 50 minutes

Resource(s):http://www.navyfcu.org/smallbusiness/fiveCs.html

Instructions, Tools, Equipment, and Supplies:

Italicized words are instructions to the teacher, normal style text is suggested script.

The day before teaching this lesson, it might be helpful to ask the students to bring in Matchbox (or similar type) cars, trucks, tractors, combines etc. for the next day’s lesson.

Small pieces of candy to give the students as they give you their toy upon entering the classroom.

Unit1, Lesson 10: The 5 C’s of Credit 1

http://www.navyfcu.org/smallbusiness/fiveCs.html

Create 5 pieces of Poster-sized paper.

Write one of the 5 C words on each piece of poster-sized paper.

Post each of the 5 pieces of Poster-sized paper around the room.

Make multiple copies of the attached check (found at the end of the lesson

Fill out a check for each student prior to the beginning of class - determine the amount you think would get the students’ attention – BE reasonable.

Make copies of the handouts provided at the end of the lesson. Make enough handouts of the 5 C’s group handouts for each student that’s in their respective group.

Make student copies of the “5 C’s of credit” Worksheet – enough for every student

Interest Approach: As students walk in the door, ask them to if they’ve remembered to bring their toy vehicle, piece of equipment, machinery etc. If they have, ask them if you can borrow the toy for the class period.

When the students give you their toy, reward them with a piece of candy and give them their check (that you’ve created for them).

I want to thank each and every one of you who sold me your car / equipment, implement, piece of machinery! I am very excited with my purchases and want you to know the check I have just given you is a down payment on my purchase.

However, that is all the extra money I can come up with right now. Therefore, I am going to need you to let me pay you for the rest of the value of your car over the next 36 months. Is that all right with you? Are you feeling good about this sale? In all reality you really don’t know that much about me or what my financial situation looks like. What concerns might you have about this process?

Illicit responses from the students - leading them to the question of, “Can I trust that you will finish paying me for my vehicle, implement, piece of equipment?”

Write their concerns and questions on the board, overhead projector, whiteboard etc. so the class can refer back to them periodically.

So, if you are going to loan me money for the purchase of your vehicle, implement, piece of equipment - OR even $10.00 so that I can eat lunch today, what are some things you might want to know about me?

Take responses; writing them on the overhead / whiteboard / chalkboard; then narrow down the topic through the following classroom activity.

When I say CREDIT, I want each of you to take out a piece of paper and a writing utensil; then write down any words you might want to know about a person you’re planning to loan money to. Does anyone have any questions?

Listen for questions – address any questions if there are any; if not –

All right everyone! CREDIT!


Give the students one minute – after one minute has passed say –

Oh – wait a minute; there’s a catch; each of the words has to start with the letter C.

Give the students a few minutes to come up with several ‘C’ words (approximately 3-4 minutes) Make sure the five ‘C’ words included in this lesson are part of the list. To ensure this happens you may need to walk around the room during the 5-minute period and lead some students to the correct answers.

EXCELLENT WORK everyone! Put your pens / pencils down.

Now perform a round robin,

When I say SHOUT IT OUT, we will begin eliciting responses from around the room; I’d like each one of you to shout out one C word that you wrote down. If a word that you’ve written down is shouted out before it’s your turn, scratch it off your list and use the next one. Any questions? Great! SHOUT IT OUT!

Elicit a student volunteer to record all of the responses on a writing surface.

As a class, we are now going to vote on the 5 C words YOU think would be the most important decision makers for you to decide whether you would loan money to someone or not.

In some orderly fashion have each of the students go to the board and put a mark beside the 5 they would choose.

You may need to explain a few of the words before they go to the board. (capacity, capital, collateral, conditions, character) If you are concerned they will not vote for the right ones, have fun with it and make it obvious with an underline, bold print or some other means of guiding them to the correct five. You did a great job.

Now that we have identified 5 C words that should be of importance to you if you are loaning money or getting loan lets take a closer look at the true meaning of each word.

Objective 1: Divide your class into five groups; assign each group ONE of the C words.

In the next 15 minutes, each group will become the expert on the word they were assigned.

Provide each group with their respective worksheet ‘handouts.’ Instruct them to answer the questions posed on their worksheet and prepare themselves to teach the whole group using their answers as an outline.

Also point out the Poster-sized pieces of paper located around the room. Ask them to find ‘their’ poster. Once they’ve located ‘their’ poster, indicate that they can also use these posters to help ‘teach’ their classmates – they can use them as visual aids, etc.

While the groups are working, pass out the “5 C’s of credit worksheet” to each student.

At the end of 15 minutes, stop the group’s work – devise some way to


organize the groups so that they know which order they will be presenting.

GREAT WORK EVERYONE! We’re not ready to share what we’ve discovered with everyone in the class. When I say, LITTLE PROFESSOR, the groups will take turns presenting what they’ve learned about their C’word to the rest of the class. If your group is not presenting, you need to be capturing the information that’s being presented on the worksheet I handed out during your group work. Make sure to capture their information accurately because you’ll need that information for the evaluation and test. Does anyone have any questions? Great! Let’s get ready to learn from some of the greatest minds in the Agriculture Education room today! Ready? LITTLE PROFESSOR!

As each group teaches their lesson, the rest of the class should be answering the questions on a solutions sheet or on the provided worksheet.

Review/Summary: Great work Professors. Everyone put a lot of effort forth today in learning about the 5 C’s of credit.

Now that you know a little more about how loan amounts are determined, and even WHO to loan money to, do you feel a little bit better about selling your car, vehicle, implement, piece of equipment to me?

What questions should you have asked me BEFORE selling your item to me?

Elicit responses from the students – making sure they repeat the 5 C’s of credit they learned today.

Application--Extended Classroom Activity:

Invite a loan officer from the local lending institution to speak to your class about the importance of the 5 C’s of credit and which ones they rely most heavily on when determining whether they will issue a loan or not.

Ask students to visit with their parents about the 5 C’s of credit; and how they’ve used them in their professional and personal lives.

Application--SAE Activity:

Have students write a paragraph about how this lesson applies to their SAE.

Evaluation: See the “5 C’s of Credit” quiz located at the end of this lesson.

Evaluation Answer Key:

1. Capacity

2. Capital

3. Collateral

4. Conditions

5. Character


5 C’s of Credit Worksheet Name_______________Date _________________

Directions – Fill in the blanks as your classmates present their findings.

Capacity

Definition ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Positive Example ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Negative Example ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

List 5 ways capacity could be demonstrated : __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________

Capital

Definition ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________



List 5 ways you can demonstrate you have the necessary capital to receive a loan. __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________


Collateral

Definition ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________



List 5 items that could be used as collateral. __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________

Conditions

Definition ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________



List 5 ways you might know if the conditions were right for your plan. __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________


Character

Definition ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________



List 5 ways strong character could be demonstrated. __________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________


5 C’s of Credit Quiz Name ________________Date _________________

Directions – Please place the correct letter next to the definition that most closely matches the word.

_____1. You can produce enough cash to repay the loan

_____2. This looks at how much equity you have

_____3. It won't necessarily make the monthly payments, but it could, if liquidated, help repay the loan

_____4. Make sure there is a market for your business

_____5. This is the general impression you make on the lender

A. CollateralB. CapacityC. CapitalD. CharacterE. Conditions



CapacityYour business plan and/or prior year(s) financials must show that you can produce enough cash to repay the loan. This is the most

critical of the five Cs.

Directions – Provide a written and a visual (picture, motion, cheer etc.) answer to the following questions and be prepared to teach the rest of your classmates.

Define your C word in 10 words or less (be creative, come up with something to really help you and your classmates remember the definition of the word) _________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that a person has the capacity to pay off the loan. (Positive example)_________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that a person does not have the capacity to pay off the loan. (Negative example)_________________________________________________________________________________________________________________________________________________________________________________

List 5 ways capacity could be demonstrated._________________________________________________________________________________________________________________________________________________________________________________

Create a demonstration for your classmates. One of you is the lender the rest of the group is the borrower(s). On the back of this page script your demonstration for the class. Examples – banker on one side of desk, invites you in, asks what you want a loan for, and asks if you have the capacity to pay off the loan if given. Be prepared to answer the questions professionally to ensure you will get the loan. You may want to demonstrate how not to get the loan and then how to get the loan.


CapitalHow much equity do you have? This money may be obtained from your

deposits, an equity loan against your personal residence or other sources. You need to be prepared to put something on the line to ensure your

business's/loan’s success.



Find an actual example or make up a scenario to show a lender that a person has the capital to pay off the loan. (Positive example)_________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that a person does not have the capital to pay off the loan. (Negative example)_________________________________________________________________________________________________________________________________________________________________________________

List 5 ways you can demonstrate you have the necessary capital to receive a loan._________________________________________________________________________________________________________________________________________________________________________________

Create a demonstration for your classmates. One of you is the lender the rest of the group is the borrower(s).


On the back of this page script your demonstration for the class. Examples – banker on one side of desk, invites you in, asks what you want a loan for, and asks if you have the capital to pay off the loan if given. Be prepared to answer the questions professionally to ensure you will get the loan. You may want to demonstrate how not to get the loan and then how to get the loan.


CollateralA lender looks at collateral as an additional credit enhancement. It won't necessarily make the monthly payments, but it could, if liquidated, help

repay the loan. Regulations limit and dictate how much collateral is required. The loan request generally cannot exceed a percentage of the

collateral value.



Find an actual example or make up a scenario to show a lender that a person has the collateral to pay off the loan. (Positive example)_________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that a person does not have the collateral to pay off the loan. (Negative example)_________________________________________________________________________________________________________________________________________________________________________________

List 5 items that could be used as collateral._________________________________________________________________________________________________________________________________________________________________________________

Create a demonstration for your classmates. One of you is the lender the rest of the group is the borrower(s).


On the back of this page script your demonstration for the class. Examples – banker on one side of desk, invites you in, asks what you want a loan for, and asks if you have the collateral to pay off the loan if given. Be prepared to answer the questions professionally to ensure you will get the loan. You may want to demonstrate how not to get the loan and then how to get the loan.


ConditionsBe prepared to prove that the conditions are right for your type of

business. Make sure there is a market for your business, based on the conditions of the local, regional and national economy, the type of

industry, the competitiveness of the business and your experience in the industry and managing a business.



Find an actual example or make up a scenario to show a lender that the conditions are right to pay off the loan. (Positive example)_________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that the conditions are not right to pay off the loan. (Negative example)_________________________________________________________________________________________________________________________________________________________________________________

List 5 ways you might know if the conditions were right for your plan._________________________________________________________________________________________________________________________________________________________________________________

Create a demonstration for your classmates. One of you is the lender the rest of the group is the borrower(s). On the back of this page script your demonstration for the class. Examples – banker on one side of desk, invites you in, asks what you want a loan for, and asks if you have the conditions that are right to pay off the loan if given. Be prepared to answer the questions professionally to ensure you will get the loan. You may want to demonstrate how not to get the loan and then how to get the loan.


CharacterThis is the general impression you make on the lender. Your educational background and business experience will be reviewed, along with your

credit score. It's important to manage your personal credit carefully. Statistics show that the way you handle your personal credit is a strong

indicator of how you'll manage your business credit.



Find an actual example or make up a scenario to show a lender that a person has the character to pay off the loan. (Positive example)_________________________________________________________________________________________________________________________________________________________________________________

Find an actual example or make up a scenario to show a lender that a person does not have the character to pay off the loan. (Negative example)_________________________________________________________________________________________________________________________________________________________________________________

List 5 ways strong character could be demonstrated._________________________________________________________________________________________________________________________________________________________________________________

Create a demonstration for your classmates. One of you is the lender the rest of the group is the borrower(s). On the back of this page script your demonstration for the class. Examples – banker on one side of desk, invites you in, asks what you want a loan for, and asks if you have the character to pay off the loan if given. Be prepared to answer the questions professionally to ensure you will get the loan. You may want to demonstrate how not to get the loan and then how to get the loan.


Documents

Resume Wizard - Colorado FFAffa.cccs.edu/wp-content/uploads/2015/02/The-5-cs-of-cre… · Web viewNow perform a round robin, When I say SHOUT IT OUT, we will begin eliciting responses