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Where to Loan for Business in the Philippines

Most business enterprises are lacking in terms of financial capacity. Some may get into a situation that needs funds for emergency purposes. Some may have researched and studied that to further expand their business, they need additional funding and many other purposes. With this in mind, reaching out to financing institutions will greatly help many entrepreneurs support their business needs.

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Written by: Aunt Piggyy

Rating

4.4/5
Security Bank

Security Bank offers attractive loan terms. Get this offer now.

Rating

4.3/5

Loan Term

1-12 months

Est. APR

% 1.39 - 3.49 per month

Loan Amount

Php250,000 - Php5,000,000

Rating

4.1/5
Bank of the Philippine Islands

Avail of low interest rates with BPI. Do not miss this offer.

Rating

4.1/5

Loan Term

3 - 12 months

Est. APR

% 48-54

Loan Amount

10,000 - 3,000,000 PHP

Why Do Businesses Need a Business Loan?

 

There are many possible reasons why business enterprises need additional funding. It can be for product improvement, a need to increase working capital, repair and maintenance of machinery and equipment, plant expansion, etc. The borrowing of funds can be part of the company’s strategy for a long-term benefit. Newly established businesses or even big companies may apply for a business loan.

 

Where to Loan for Businesses in the Philippines?

 

There are many lending sources borrowers may choose from here in the Philippines. They can borrow from a government agency that helps business enterprises with their financial needs, financial intermediaries such as traditional banks, non-bank financial institutions, private lenders, etc. 

 

Two Types of Loan 

When taking out a loan, financial institutions will either require collateral or not. Depending on the product, the loan will either be secured or unsecured. 

  • Secured Loan – secured loan uses collateral. The type of collateral needed will depend on the qualification required by each lending company. This collateral will guarantee that when there is a failure in payment of the loan on its due date, the collateral will be placed in an auction, and the proceeds will be for the payment of the loan. Also, the collateral may help the approval rate of the borrower. The higher the market value of the collateral, the higher the chance of the loan application being approved.
  • Unsecured Loan – the basis of the approval of a loan is the borrower’s credit standing and no collateral will be required to back the loan approval. 

 

Business Loans Examples

 

Government agencies

 

OWWA (Overseas Workers Welfare Administration) Overseas Filipino Workers – Enterprise Development and Loan Program (OFW-EDLP)

 

It is a project of the OWWA in partnership with the Landbank of the Philippines (LBP) and Development Bank of the Philippines (DBP) to help OFWs set up their businesses in the country.

 

Loan Features

Loan Amount

  • Sole proprietor:  ₱100,000 to ₱2,000,000
  • Partnership/Corporation/Cooperative: ₱100,000 to ₱5,000,000

 

Interest Rate: 7.5% per annum

Equity: 20% of the Total Project Cost 

 

Eligibility Requirements

  • Member of OWWA (active/non-active)
  • Earned training for Enhanced Entrepreneurial Development Training
  • If the married OFW is currently working overseas, the representative applicant must be the spouse.
  • For single, widows, and widowers, the representatives can be the following:
    • Parent: not more than 60 years old
    • Child: at least 18 years old

 

DTI Pondo sa Pagbabago at Asenso (P3)

This program of DTI helps Small Enterprises with additional working capital.

 

Loan Features

Loan amount: ₱5,000 to ₱200,000

Interest rate: 2.5% per month

 

Documentary Requirements

  • A duly filled out application  form
  • DTI Registration
  • Business Registration
  • Valid ID
  • Barangay Clearance

 

Banks

 

Security Bank SME Business Express Loan

 

Loan Features:

Loan amount: ₱1,000,000 to ₱5,000,000

Interest Rates & Loan Term: 

  • 12 months – 1.50%
  • 18 months – 1.60%
  • 24 months – 1.90%
  • 36 months – 1.95%

 

Other Charges:

Administration fee – ₱3,000

Notarial fee

  • Sole proprietor – ₱400 
  • Partnership and Corporation – ₱800
  • Documentary Stamp Tax – Loan proceeds/200*1.50
  • Late payment charge – basis: unpaid amount for the last month
  • Late payment percentage: 3%

 

Eligibility Requirements

  • A registered business under Philippine Laws
  • With business operations of at least 3 years
  • No existing debt that is more than 40% of monthly income
  • For Partnership/Corporation
    • Approval and signature of the loan form of the majority stockholder
    • If multiple majorities stockholders, only one needs to sign
  • Existing security bank account holder
  • A resident of the Philippines (permanent)
  • The representative must be at least 21 years old but not more than 65 years old 

Rating

4.4/5
Security Bank

Security Bank offers attractive loan terms. Get this offer now.

Review

BPI SME Term Loan

SME term loan is a collateral-based loan offered by BPI to business loan applicants for additional working capital, business expansion, purchase of equipment, payment of short-term obligations, etc. 

 

Loan Features

Loan Amount: Minimum of ₱300,000

Loan Term: up to 5 years.

Collateral Accepted: bank deposits, investment, or real estate mortgage

Other charges:

  • Administration fee: ₱3,500

 

Eligibility Requirements

  • Filipino citizen
  • Minimum of 2 years of residency
  • 21 to 70 years old.
  • With business operations of at least 3 years

Rating

4.1/5
Bank of the Philippine Islands

Avail of low interest rates with BPI. Do not miss this offer.

Review

Non-Banking Financial Institutions

 

First Circle

First Circle is a private lending company that offers a revolving credit line that helps SMEs with their short-term financial needs.

 

Loan Features

Loan amount: up to ₱5,000,000

Interest rate: 1.39% per month or best price guarantee percentage if applicable.

Loan term: up to 6 months.

Loan Term

1-12 months

Est. APR

% 1.39 - 3.49 per month

Loan Amount

Php250,000 - Php5,000,000
Review

Radiowealth Finance Corporation SME Business Loan

 

Loan Features

Loan Amount: ₱10,000 to ₱3,000,000

Interest Rate: 0.04% to 1.44% per month

Loan Term: 1 month to 36 months

 

Eligibility Requirements

  • Filipino citizen
  • 21 years old and above 
  • With 2-year residency in the Philippines
  • With a minimum of 1-year business operation
  • For employed: minimum of 1-year employment and a basic salary of ₱18,000 per month.
  • For professional borrowers: preferably a practicing professional, and a valid PRC license.
  • For self-employed: a minimum of 1-year business operation

Loan Term

3 - 12 months

Est. APR

% 48-54

Loan Amount

10,000 - 3,000,000 PHP
Review

Conclusion

 

There are a lot of business loan providers in the Philippines where borrowers may choose a loan product depending on their needs and current financial situation. With numerous lender providers, borrowers may compare which loan product they could maximize the benefits from to help their thriving businesses succeed.

 

Aunt Piggyy

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