Small Business Loan Without Collateral in the Philippines

Small businesses play a key role in the economic progress of communities. Through them, jobs are created and the quality of life of the people improves. Knowing this, when small businesses wish to expand, the difficulty is always finding where to get more funding by taking a small business loan without collateral. 

What is a Business Loan Without Collateral?

There are four types of business loans in the Philippines – Term Loans, Credit Line, Secured Loans, and Unsecured Loans. A Business Loan without collateral is called an “Unsecured Loan”. 

Unsecured business loans do not require collateral and are more difficult to obtain, particularly for people who have a poor credit history. When a borrower is able to obtain a business loan without collateral, it has a higher interest rate, shorter loan duration, and smaller loan amount.

Business Loan Purposes

Entrepreneurs have many reasons for applying for a business loan. The most common of which are the following:

• Business Expansion
• Equipment Purchase
• Additional Working Capital

Unsecured Business Loans Option in the Philippines

Here are some of the banks and money lenders that offer business loans without collateral in the Philippines today: 

Security Bank SME Business Express Loan

Loan Features:

Loan Amount: Php1,000,000 to Php 5,000,000
Loan Tenure: 12 months to 36 months

Interest Rate: 1.50% – 1.95%

First Circle Revolving Credit Line

Loan Features:

Loan Amount: Php 250,000 to Php 5,000,000

Loan Tenure: credit line renewable every 6 months

Interest Rate: 1.39% – 3.49% per month

Conclusion

Even if providing an unsecured loan is risky for banks and private lenders, there are still financial institutions that off this in the Philippines, understanding that providing access to financing to small businesses is a great step towards empowering small businesses and helping them grow.