Getting Business Loan in the Philippines

Isaias Lijauco

Tips

Mar 03, 2020

Business Loans in the Philippines

Getting financing is one of the things you need to figure out if you want to start your own business. Luckily for the aspiring Pinoy entrepreneurs, there are a lot of banks and lending firms that offer business loans in the Philippines. Read on below if you’re considering getting a business loan yourself.

Best Place to Get a Business Loan in the Philippines

There are three main loan providers in the Philippines: banks, the government, and private lending firms.

Banks

Banks are the most popular sources when it comes to business loans. One reason for this is because they provide more flexible and easier loan terms and repayment methods. Still, their requirements are very strict, and applicants must have good credit history, financial status, and all the necessary documents to get approval.

Government

Meanwhile, the Philippine government is also willing to provide financial assistance to aspiring Filipino entrepreneurs. However, you have to be part of the government agency that offers the lending program in order to get qualified. Depending on the agency, membership could take a long time, not to mention a tedious process.

Private Lending Firms

But if you don’t want to get any loan from either a bank or the government, you can still finance your business through the private lending firms operating in the country. Unlike bank or government loans, lending products from private entities tend to have simpler application processes. Some of the best firms, like Global Dominion Financing Incorporated, also have fast approval processes, allowing you to get the money within days.

Steps to Get a Business Loan in the Philippines

Once you decide where to get the financing for your business, you need to take certain steps to ensure a smooth application process and higher chance of approval. And while requirements may differ among banks, government agencies, and private lending firms, these general steps are helpful for when you’re applying to any of them.

Check Your Eligibility

First, you need to check if you’re qualified for the loan in the first place. Although these might vary depending on the lender, the general criteria is always the same:

For Sole Proprietors

  • Filipino citizenship
  • 21 to 65 years old upon loan maturity
  • Have a business with at least 2 years of profitable operation (for entrepreneurs)
  • Have at least 2 years of steady income (for non-entrepreneurs)
  • Good credit score

For Partnerships or Corporations

  • Have a DTI- or SEC-registered business with at least 2 years of profitable operation
  • Minimum annual gross sales
  • Good credit score

Have a Good Reason

Next, you need to have a good reason why you’re applying for a loan. It’s not enough to say you’re planning to use the money to start a business. You need to be more specific, like to purchase new equipment or to increase your working capital.

Borrow an Exact Amount

You also need to decide how much money you will borrow. Too much and the loan provider might reject your application on the spot. But too little and you might end up with insufficient funds for your planned business. Make an estimate as to the amount of money you’ll need before visiting the moneylender.

Submit All Requirements

Lastly, you need to make sure you meet all the requirements for the business loan product you picked. This involves completing the application form, getting all the papers that would bolster your qualifications for the loan, and passing the screening (if any).

Conclusion

Whether you’re looking for a personal loan or a business loan, you need to think things through before applying. By following the steps above, as well as deciding which loan provider to go to, you’ll be able to get funding for your planned business in no time.