Starting your own business is a common aspiration for many individuals. While it may seem daunting, it simply involves identifying a need and fulfilling it. The challenge lies in obtaining funding for your idea. Fortunately, a personal business loan can provide the necessary financial support. QUICK BUSINESS LOANS IN THE PHILIPPINES
ADVANTAGES OF THE PERSONAL BUSINESS LOAN FAST APPROVAL
The primary benefit of acquiring funds is the chance to establish a personal business that exclusively belongs to you. Considering the low-interest rates, favorable repayment terms to lenders, and the fast-paced growth of the Philippine economy, it is an opportunity that should not be missed.
If you are contemplating launching your own venture, it is imperative to secure a personal business loan at the earliest. The current economic situation is uncertain, with no logical explanations or predictable forecasts. By obtaining a personal business loan now, you ensure future financial stability and growth for yourself.
REQUIREMENTS FOR A PERSONAL BUSINESS LOAN
Each credit institution sets unique requirements for borrowers, however, you can often find the following list of required documents:
- certificate of income (if available);
- tax returns;
- permission for business;
- information about property abroad;
- an extract from the personal account;
- a completed application form for a loan applying;
- certificate of registration DTI / SEC.
Each credit institution reserves the right to require a different or additional list of documents.
WHERE IS IT BETTER TO TAKE A PERSONAL BUSINESS LOAN?
There are limited entities that provide loans in the Philippines. Despite the lack of formal monopolies, the market in the Philippines is not yet abundant in terms of supply. One can find recommendations from both private lenders and government initiatives. In this regard, we will discuss the most well-known organizations and programs that offer loans.
BPI business loan
BPI offers personal loans that can be used for urgent needs or for starting a franchise business. To be eligible, the applicant’s family must have a minimum income of 50,000 Philippine pesos. BPI is the sole bank in the country that provides personal loans specifically for franchise development. The requirements and terms for obtaining a loan for regular purposes and for a franchise are considerably distinct.
Straight loans from BPI
Need a specific amount of funds for payments within a prescribed time period? BPI offers straight loans which may be short-term (payable within 365 days) or long-term (more than 365 days).
- Short–Term Loan (STL)
- Term Loan (TL)
BDO lending for small businesses
This institution provides personal loans ranging from 1 to 20 million Philippine pesos, with repayment periods ranging from 1 to 10 years. The interest rate increases as the loan term lengthens. The minimum interest rate is 8% for a 1-year term, and it goes up to 11% for loans with repayment periods of 6 to 10 years. Both residential and commercial properties can be used as collateral.
Project Finance Loan
Project Finance Loan provides for financing of projects that depend on project cash flow as repayment.
– Term Loan
A term loan may be medium-term, which is to be paid within 1-3 years, or long-term, paid over 3 – 5 years.
– Working Capital Loan
A working Capital Loan is used to fund the day-to-day needs of your company.
– SME Loan
Turn your opportunity into reality and immediately respond to challenges. SME Loan can provide the financing you need to expand your business.
The Landbank OFW reintegration program (OFW-RP)
Landbank provides business loans for specific sectors such as agriculture, manufacturing, and tourism. It stands out among other banks in the country by offering a unique lending program in partnership with the Overseas Workers Welfare Administration (OWWA) that exclusively caters to Filipino citizens working abroad (OFWs) who aspire to establish a business in their home country as an alternative to working overseas. This program offers OFWs the chance to engage in entrepreneurship and create business opportunities within their homeland instead of relying solely on foreign employment.
- Eligible Borrowers. OFWs certified by OWWA on membership and capacity building program attended.
- Eligible Projects. Viable projects that will generate a net income of at least equal to the poverty threshold set by NEDA.
- Loan Purpose.
- Working Capital.
- Fixed Asset Acquisition.
- Amount of Loan.
- Minimum of P300,000.
- Maximum of P 2 Million.
- Term of Loan. Based on cash flow but not to exceed 7 years (inclusive of 2 years grace period).
- Loan Security.
- Chattel on Machinery & equipment.
- Hold out on the deposit.
- Deed of Assignment on inventory & receivable.
Loans from PSBank SME
PSBank provides two kinds of personal loans designed for small and medium-sized enterprises (SMEs) in the Philippines. These include a credit line for SMEs and a loan for SMEs with Prime Rebate. Customers who borrow money from PSBank can benefit from discounts for making early payments, making advances, and depositing funds that exceed the amounts specified in the rules.
online business loan calculator
Government business loans
This program is suitable for companies with assets below 3 million Philippine pesos, typically small street shops or kiosks. The program offers the benefit of low-interest rates but may have the drawback of requiring small payment amounts. It is sometimes possible to obtain this loan without a guarantor, making it a convenient option for those looking to develop a narrow business focus.
Program Pondo sa Pagbabago with Pag-asenso (P3)
The initiative called “Pondo sa Pagbabago with Pag-asenso” (P3) was introduced at the beginning of 2017 as a cost-effective substitute for the 5-6 loan system. The program’s primary goal is to challenge the market domination of big corporations. With P3, borrowers are not obligated to provide a deposit and are only required to submit a complete set of mandatory documents.
Business Lending SSS
The Social Security System (SSS) provides four types of business loans to citizens of the country, including two options suitable for those starting a new business: the Business Development Loan Facility (BDLF) and Access of Small Enterprises to Credit Opportunities (ASENSO). These loan programs are accessible to 60% of individuals who currently operate a business or are planning to establish one.
HOW TO GET A PERSONAL BUSINESS LOAN
To improve the likelihood of being approved for a loan, it is necessary to submit authentic documents. However, the final decision rests with the lending institution. If the candidate meets the lender’s criteria, they may receive the loan. However, if not, they will be informed of the rejection promptly. In such a scenario, it is advisable to consider approaching another financial institution.
Example of calculating interest and loan payments
|TERM||10 days||20 days||30 days|
|LOAN AMOUNT||15000 PHP||15000 PHP||15000 PHP|
|INTEREST AMOUNT||1500 PHP||3000 PHP||4500 PHP|
|TOTAL REPAYMENT||11500 PHP||13000 PHP||14500 PHP|
WHAT IS A FRANCHISE LOAN?
Are you ready to open a franchise in the Philippines but lacking the proper funding? Or perhaps you already have a couple of franchises and wish to expand your enterprise?
An online franchise business Philippines might be right for you. There are numerous benefits to franchises using these loans, including the ones explored in this blog.
Where to Apply for a Franchise Business Loan in the Philippines?
There are many banks that offer loans to entrepreneurs who are interested in franchising in the Philippines. Here are some examples:
• Philippine National Bank PNB offers Kabuhayan SME Loans for both existing and startup businesses. This loan provides short-term funding for low-franchise businesses in the Philippines, with a minimum borrowing amount of PHP 500,000 and a maximum loan term of five years.
• Land Bank In partnership with the Overseas Workers Welfare Administration, Land Bank provides loans for Overseas Filipino Workers (OFWs) who want to invest in a franchise. You can borrow a minimum of PHP 300,000 and a maximum of PHP 2 million.
• BDO (Banco de Oro) BDO offers Small Business Loans for entrepreneurs. You can borrow a maximum of PHP 20 million for a one-year term, with the amount depending on the appraised value of your collateral. Loan payments can be made via an Auto Debit Arrangement through your BDO Savings or Current Account. Visit any of BDO’s 740 branches nationwide for more information.
• BPI Family Savings Bank BPI Family Savings makes it easy to avail of loans, including franchising loans, through their Ka-Negosyo Loans. You can borrow at least PHP 500,000 for a term of at least two years. Interest payments are required within the first six months, with principal payments beginning in the seventh month. For inquiries, you can visit any of their branches throughout the Philippines.
HOW TO GET APPROVED FOR A FRANCHISE LOAN?
Now that you know the various types of franchise loans, you might be thinking about how to apply and get approved. Here are some tips to keep in mind:
1. Have a business plan
Lenders are risk averse and do not give loans without knowing what their funds will finance. Provide a business plan when applying for a loan.
2. Work on your credit score
If you know you need a good credit score beforehand, you must work on increasing that number.
3. Be ready to pledge collateral
Prepare an inventory of your possessions, determine their market worth, and assess which assets you are willing to use as collateral. Various funding options are available for your franchise in the Philippines, and it’s crucial to conduct research before selecting the one that suits your business needs the most. We trust that this blog has provided you with guidance on the steps to take to obtain capital for your new business venture. We wish you good luck!