What is an Interest Rate?
In simple terms, interest rates are the charges levied for borrowing money; they are expressed as a percentage of the total amount borrowed over the life of the loan. However, the total amount they pay back in interest varies based on the duration of the loan and whether interest rates are fixed or variable. Moreover, lenders have varying criteria when deciding the interest rates to offer to their clients. This includes the credit history, income, and the length of the loan to name a few.
The table below shows the information on BDO SME loan interest rates taken from the bank’s official website. However, keep in mind that these quoted rates are subject to change without prior notice.
| Fixing Period | Interest Rate |
| 1 year | 6.25% |
| 2 years | 6.25% |
| 3 years | 6.75% |
| 4 years | 7.25% |
| 5 years | 7.25% |
BDO SME Loan
Term Loan
The Term Loan is one of the SME loans that entrepreneurs may apply for at BDO. It is geared towards providing the needed funds for long-term business developments. The BDO term loan is ideal when buying assets such as machines and equipment, acquiring real estate properties, or constructing, repairing, or upgrading business facilities.
Loan Features
Loanable Amount: ₱1 Million to ₱20 Million
Loan Term: maximum of 10 years
Collateral Accepted: Real Estate Property (house and lot, commercial property, vacant lot, condominium unit, townhouse, or a mixed-use property)
SME Ready Check
Recognizing that there are businesses that are not financially equipped for unforeseen business demands, BDO has introduced the SME Ready Check that grants business owners access to finances without having to go through the loan process repeatedly – saving them time. SME Ready Check is a revolving credit line designed for purchasing inventory or supplies to cover seasonal or bulk orders. This product can also be used in covering operational needs or paying for suppliers while waiting for customer collection.
Borrowers can avail of the funds they need by issuing checks against their approved credit line.
Loan Features
Loanable amount: ₱3 Million to ₱20 Million with 1-year validity and option to renew
Eligibility
- At least 21 years old but not more than 70 years old at the time of loan maturity
- For Business Owners:
- Sole Proprietorship, Partnership, Corporation
- At least 2 consecutive years of profitable business operations
- Minimum annual gross sales of 1 Million
- Business is serviced by BDO
How to Apply for SME Loan
Once applicants have verified their eligibility for the loan, they may now submit the required documents through any of the following channels:
- Apply online
- BDO SME Loan Provincial Business Centers
- Nearest BDO Branches
BDO has a complete list of provincial business centers – including complete addresses and available contact numbers. The bank also provides a bank locator, updated banking schedule, and other details that applicants may need to know in their application.
Conclusion
Interest rates always apply to most lending or borrowing transactions. This is why those businesses that would like to support their expenditures and grow their operations by taking out an SME loan from BDO and other trusted banking institutions should pay close attention to the interest rates they offer since a higher interest rate results in higher repayments during the duration of the loan.
Aunt Piggyy
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