Bank Loan for Business Philippines

The Need for Bank Loans

While it is beneficial to have various financing alternatives from online and private organizations, bank loans remain the better option, not only because of their legitimacy but also for their wide selection of loan solutions. Banks offer personal loans, auto loans, and other consumer and business loan products. They also provide better alternatives for those needing to refinance an existing loan at a lower interest rate. 

Although bank loans often need more documentary requirements as compared to other lending companies, the borrower may be confident that he is dealing with a well-established source of loan products – one that is permitted and regulated by the government to provide financial products and services. 

Examples of Bank Loans in the Philippines 

Security Bank SME Business Express Loan

Business owners looking for ways to support their company’s short-term demands such as equipment acquisition, office spaces, or cash for daily operations without putting their business or personal properties at risk should consider Security Bank. Its SME Business Express Loan also provides quick and easy applications with minimal documentary requirements.

Loan Features

Loan Amount: ₱100,000 to ₱5 Million 

Loan Payment Term: 12, 18, 24, or 36 months 

Loan Rates:

Fees and Charges

Processing Fee: ₱3,000

Notarial Fee:

• ₱400 for Sole Proprietorships
• ₱800 for Partnerships and Corporations 

Penalty Fee: 3% of past-due amount for the month 

Eligibility Requirements 

• The business to which the loan is being applied must be registered to operate in the Philippines
• Must have been in business for a minimum of three years and has been profitable for the last year
• There must be no outstanding debt that exceeds 40% of the monthly revenue of the company

Robinsons Bank Go! Small Biz 

Robinsons Bank Go! Small Biz provides flexible finance options and is available to both individuals and businesses. Those who wish to establish their own business can use this loan to franchise or as operating capital, whilst existing businesses can use it to finance development strategies and buy assets for the business. To apply, the interested applicants only have to visit the nearby Robinsons Bank branch, bring all requirements, and wait for confirmation.

Product Features

Loanable Amount: ₱500,000 to ₱20 Million

Term Loan: 1 to 10 years 

Credit Line Facility: 1-year credit line 

Acceptable Collateral: 

• Residential, Commercial, and Industrial Property 
• Deposits (Peso / Dollar TD, regular savings) 

Eligibility Requirements 

Employed Individual 

Permanent / Regular employee for at least one (1) year with the present employer and a minimum of three (3) years of employment continuity

Sole-proprietorship, Partnership, Corporation

Operating for more than three years and latest 3 years should be profitable 

UnionBank Business Loan

UnionBank business loans give additional operating capital to help MSMEs build and expand their businesses. This UnionBank offer is ideal for Filipinos who want to open a modest online store or a mom-and-pop coffee shop in their neighborhood. They may be able to receive funding of up to ₱1 million as long as they are Filipino citizens over the age of 18.

Loan Features

Loanable Amount: ₱50,000 to ₱1 Million

Loan Terms: 3, 6, 12, 36 months

Interest Rate: 3% per month 

Documentary Requirements 

For Sole-proprietorship or Partnership:

• Valid ID (Primary)
• Selfie Image
• Business of Inventory Photo 
• Proof of Business Existence (at least one (1) month of any of the following documents issued within a maximum of three (3) months prior to the date of application:
  • Invoice / Official Receipt 
  • Purchase Order 
  • Electricity Bill 
  • Water Bill
  • Internet Service Provider Bill

For Corporation:

Board Resolution to Borrower to be emailed at [email protected] for UB template 

BPI SME Term Loan

The BPI SME Term Loan is perfect for businesses that need to acquire inventory or equipment, finance working capital, make supplier payments, or meet other potential business needs. This loan offer ensures that business owners have the financial means to make such purchases that contribute to the success of the company.

Loan Features

Loanable Amount: Minimum of ₱300,000

Loan Tenor: Maximum of 5 years 

Acceptable Collateral: Real estate mortgage, deposit, or investment

Processing Fee: ₱3,500

Eligibility Requirements 

• Filipino citizen
• At least two (2) years in present / immediately preceding residence
• At least 21 years old but not more than 70 years old at the time of loan maturity
• At least three (3) years of business operations

When to Apply for Bank Loans

The fact that bank loans are backed by the government increases their credibility in the eyes of the general public. This is why banks and the majority of their products are among the most preferred sources of financing, not just for individuals but also for businesses. Although bank loans are more accessible to date, thanks to online applications and virtual processes, it would still be best for business owners to understand when to consider applying for bank loans. 

Bank loans are indeed an excellent solution for business owners who would like to start or continue expanding their operations but have exhausted all other options. Since businesses often demand thousands to millions of pesos and the owner does not always have the resources to meet such an amount, a bank loan may be a viable alternative given the amount that the owner may access. After all, bank loans generally carry lower interest rates compared to other lenders, which gives business owners more reason to rely on them. 

But, bank loans are not ideal for those who have low credit scores. Banks often conduct credit checks as they would like to know that the client to which they have entrusted their money understands how to manage his finances and is capable of repaying the loan on time. So, before proceeding with the application, it would be best to review personal records and scores to know whether or not you are eligible for a bank loan. 

Conclusion

Bank loans for businesses in the Philippines are an excellent source of assistance for business owners whose businesses are neither self-funded nor supported by investors. While bank loans for businesses provide a much-needed economic boost to cover most expenses, it is crucial to choose the right type of business loan that best fits the demands of the business in order to experience most of its promising benefits.