Best Providers For Business Loan in Philippines for Entrepreneurs

Are you starting a business and need money in the Philippines? Getting cash is key to kick off or grow your company. You have many choices, and picking the right loan can help your business take off and do well.

You’ll find lots of places to get business loans in the Philippines, from old-school banks to new online money lenders. This guide will show you top lenders different kinds of Business Loan in Philippines , what you need to qualify, and how to apply. You’ll also learn how to compare interest rates, get the hang of various loan plans, and put together a solid application to boost your chances of getting approved. If you run a small business or work for yourself and need financial help, this big picture will guide you through the world of business loans in the Philippines.

Top Banks Offering Business Loans in the Philippines

When you need a business loan in the Philippines, you have many options. Let’s check out the main types of lenders:

Traditional Banks

Traditional banks continue to be a go-to choice for business financing. They provide organized borrowing steps and extra services such as business banking. Some leading banks include:

UnionBank: Has MSME Business Loans ranging from ₱50,000 to ₱1 million with adaptable terms.
BPI: Gives Ka-Negosyo loans to start or expand businesses.
Security Bank: Provides SME Business Express Loans up to ₱5 million without requiring collateral.
BDO: Offers SME Loans beginning at ₱1 million for long-term investments.

Online Lenders

FinTech companies and private lenders make the application process simpler and deliver results faster. These lenders use tech to make borrowing smoother allowing you to get money .

Government-Backed Institutions

Government agencies offer loan programs to help local businesses SMEs. These loans often come with lower interest rates and easier requirements. Here are some examples:

Development Bank of the Philippines (DBP): Has a Small Business Puhunan Loan Program.
Land Bank of the Philippines: Gives various loan programs for different business needs.

Types of Business Loans Available

When you’re looking to get a business loan in the Philippines, you’ll find several options that fit your needs. Let’s look at the main types you can choose from:

Term Loans

These are the most common business loans. You get a lump sum and pay it back with interest over a fixed time one to ten years. Term loans work well if you have a clear plan, like a big purchase to grow your business. They often have fixed interest rates, but you can also find ones with rates that change.

Credit Lines

A credit line works like a personal credit card giving you a set amount you can borrow. You pay interest on what you use, which makes it a good choice to manage your cash flow. While the interest rates tend to be higher than term loans, credit lines let you use the money more .

Equipment Financing

This loan type lets you buy or swap out equipment without draining your cash. The gear acts as security, and you pay back the loan in set amounts over its expected life. This choice helps you spread the cost and maybe claim tax breaks on payments or interest.

Invoice Financing

Invoice financing gives you access to money while you wait for clients to pay. A lender pays you some of the invoice value up front, with the rest paid when the client settles up. This option is handy to fill short-term money gaps.

Eligibility Requirements for Business Loans

Getting a business loan in the Philippines requires you to meet certain standards. Banks and other lenders want to make sure your business can pay back the loan and interest. Here’s what you need:

How Long You’ve Been in Business and How Much You Make

Lenders want to see that your business has been running for 6 months to a year. This helps them know if your business is stable and likely to last. You’ll also need to show that your business has been making money for 1-3 years in a row. If you have a very small business, you need to make at least ₱500,000 a year. For bigger small and medium businesses, you need to make ₱1M-5M or more each year.

Credit Score

Your credit score has a big impact on the loan approval process. It shows how trustworthy you are with credit and how well you’ve paid back loans in the past. A better credit score boosts your odds of getting a loan approved and securing better terms. Lenders will check your personal and company bank statements from the last 3-6 months.

Collateral

For secured business loans, collateral is key. It gives the lender security lowering their risk. People often use assets like real estate, equipment, vehicles, or business inventory as collateral. You’ll need to provide relevant papers for the collateral such as Transfer of Certificate Title (TCT) or Condominium Certificate Title (CCT).

Application Process for Business Loans

Required Documents

When you’re looking to get a business loan in the Philippines, you’ll need to gather a bunch of paperwork. Here’s what you’ll need:

A filled-out loan application form
A valid ID issued by the government
Your business registration papers (DTI or SEC certificate)
A BIR Certificate of Registration
A business plan or a profile of your company
Your financial and bank statements
Something to prove your billing address
Your income tax returns

Typical Timeline

The time it takes to get a loan approved changes based on who’s lending the money. Big banks might make you wait a few weeks, but online lenders decide faster. Once you turn in your application, the lender will look over your papers and check if you’re eligible. This checking process called underwriting, helps them figure out if you can get the loan and what kind of deal they can give you.

Online vs In-Person Applications

These days, lots of lenders let you apply online, so you can send in your documents through the internet. This way is often quicker and easier. But some banks still want you to come in person for big loans or tricky applications. To apply online, you have to download the lender’s app or go to their website to fill everything out.

Comparing Interest Rates and Terms

When you’re looking to get a business loan in the Philippines, you need to compare interest rates and terms. The interest rate shows how much you’ll pay to borrow, and it can be fixed or variable. Fixed rates stay the same throughout the loan, so you know what you’ll pay each month. Variable rates can change based on what’s happening in the market.

Fixed vs Variable Rates

Fixed rates give you stability, while variable rates might start out lower but could go up over time. If you’re borrowing for a short time variable rates might work well. But if you’re borrowing for longer fixed rates give you more certainty about what you’ll pay.

Loan Tenure Options

Loan terms run from 5 to 20 years. Keep in mind extended periods often result in higher total interest costs. Think about your company’s requirements and money flow when deciding on a term.

Fees and Charges

Watch out for extra expenses such as origination fees, underwriting fees, and penalties for early payoff. Some lenders impose subscription or withdrawal fees for revolving credit lines. Always request the effective annual percentage rate (APR) to get a full picture of the loan’s real cost.

Security Bank’s Business Express Loan

Loan Features

You can borrow up to PHP7,500,000 without putting up collateral depending on certain conditions. The loan has few application requirements and doesn’t charge an application fee. You’ll see quick processing and approval in as few as 5 days, with the loan amount added to your account when it’s ready. This loan works well to fund short-term needs such as equipment, office spaces, or daily operations.

Eligibility Criteria

To qualify, your business must be registered in the Philippines, have been running for at least 3 years, and show a profit for the most recent year. The main owner needs to sign the application and have a current Security Bank account or credit card. You should live in the Philippines and be between 21 and 65 years old when the loan ends.

Application Process

Sign up on the website or get the form from a branch near you and turn it in. If you’re approved, you’ll get a text, and someone will call to schedule a time to meet. The money will go straight into your account. Your monthly payments will be taken out .

PNB’s Business Loan Options

PNB has many types of business loans to help companies big and small. These loans can be used for different things, like making your business bigger or paying for day-to-day costs.

Term Loans

You can get term loans for big projects or investments, and you can pay them back over many years. These loans are great if you want your business to grow over time.

Credit Lines

PNB offers revolving credit lines that last up to 365 days. These adaptable options help you handle immediate money needs like paying employees or buying stock.

Trade Finance Solutions

To protect international trade deals, PNB provides services such as letters of credit and trade guarantees. These tools simplify your worldwide business activities.

To learn more about PNB’s business loans, stop by your closest branch or phone their customer service line at (+632) 8573 8888. Interest rates are attractive and change based on the type of loan and your credit record.

Landbank’s MSME Loan Programs

Landbank of the Philippines, a state-owned bank, provides a range of loan options to help MSMEs throughout the country. Thanks to its wide-reaching network of 530 branches and 73 smaller units, Landbank can offer financial support even in out-of-the-way places.

Agricultural Loans

The Sulong Saka Program can help you if you grow valuable crops such as banana, cacao, or coffee. This program gives Permanent Working Capital (PWC) and Fixed Asset Acquisition/Construction (FAA/C) loans with special interest rates. For those who raise livestock, the SWINE Lending Program offers working capital and short-term loan lines to back the swine industry.

Franchise Financing

The LANDBANK Franchising Lending Program helps qualified franchisees and franchisors. It offers loans to buy fixed assets, fund working capital, and invest in franchise packages. You can borrow up to 80% of the project cost starting at ₱100,000. How long you have to pay back depends on why you need the loan and how long your franchise agreement lasts.

Technology Lending

For inventors, the Innovation and Technology (I-TECH) Lending Program works with TAPI to fund the commercial production of patented Filipino inventions. This program aims to boost tech progress and back innovative entrepreneurs in the Philippines.

First Circle’s Digital Business Financing

First Circle has a revolution-causing effect on digital financing for Small and Medium Enterprises (SMEs) in the Philippines. Their main product, the Revolving Credit Line, works like a business credit card giving you easy access to money when you need it.

Credit Line Features

You can get business loans without collateral at good rates and pay them back in ways that suit you. This revolving credit line helps you to control your cash flow and to fund projects to grow your business.

Fast Approval Process

First Circle uses the latest tech and data-driven risk models to make loan applications simple. You can expect quick answers and fast online operations making it easier to get money for what your business needs.

Industries Served

First Circle serves a broad range of SMEs seeking easy-to-access financing options. If you run a retail, manufacturing, or service business, their online platform aims to back different industries and help companies expand.

Robinsons Bank’s Go! mSME and Go! Small Biz

Robinsons Bank provides two business loan programs to back entrepreneurs: Go! mSME and Go! Small Biz. These loans meet the needs of businesses of various sizes.

Loan Amounts

With Go! mSME, you can get loans from PHP 300,000 to PHP 2,000,000. This has an impact on micro small, or medium enterprises in agriculture, industry, and services. Go! Small Biz gives out bigger loans, from PHP 500,000 to PHP 20,000,000. These loans help to start or grow businesses.

Repayment Terms

Go! mSME loans have shorter payback times, from 6 months to 2 years. Go! Small Biz offers more choices with terms from 1 to 10 years. Both programs give options to match your business cash flow.

Collateral Requirements

Go! Small Biz needs collateral to secure loans. You can put up your home, business property, or factory as collateral. They also take deposits, but the loan-to-value ratios change based on what you use as collateral. To get the full scoop on what they need for collateral, you should talk to someone at Robinsons Bank .

Business Loans in the Philippines: What You Need to Know

If you’re looking to get money for your business in the Philippines, you’ll see there are many kinds of loans out there. Knowing your options helps you pick the right one for your company’s money needs.

Short-term and Long-term Loans

Short-term loans help you cover urgent money needs such as surprise costs or managing your cash. You pay these back and they have higher interest. Long-term loans work better for big investments like buying property or growing your business. These loans give you lower interest rates and more time to pay, so you can spread out the cost over a longer period.

Secured vs Unsecured Loans

Secured loans need collateral, like property or vehicles, which the lender can take if you can’t pay. These loans often have lower interest rates and let you borrow more. Unsecured loans don’t need collateral but depend on how trustworthy you are with credit. They have higher interest rates and tougher approval rules. Your choice hinges on your assets, credit score, and how much risk you’re okay with.

Key Factors to Consider When Choosing a Business Loan

When picking a business loan in the Philippines, you should think about several key factors. Here’s what to keep in mind:

Interest Rates

Take a close look at interest rates. They can range from 6.25% to 32.05% per year, based on the type of loan. Secured loans have lower rates than unsecured ones.

Repayment Terms

Think about the loan length. Short-term loans work well for quick needs, while long-term options suit big investments better. Terms can run from 3 months to 10 years or more.

Processing Time

Think about how soon you need the money. Personal loans often get approved faster sometimes in just a day, while business loans might take longer because they need more checks.

Collateral Requirements

Figure out if you’re okay with putting up collateral. Loans with security often come with better deals but need assets to back them up. You can get loans without collateral too, but they might be harder to qualify for and cost more in interest.

Top Government-Backed Loan Programs for MSMEs

DTI’s P3 Program

The Department of Trade and Industry (DTI) started the Pondo sa Pagbabago at Pag-asenso (P3) Program to help micro-enterprises. You can get a loan between P5,000 and P200,000, based on how big your business is and how well you can pay it back. The interest tops out at 2.5% each month, which costs less than what unofficial lenders charge. To get this loan, you must work for yourself as a micro-entrepreneur, have run your business for at least a year, and have the right paperwork.

SB Corp’s MSME Loans

The Small Business Corporation (SBCorp) has a direct impact on MSMEs through its lending program helping to close the finance gap for businesses that show promise but lack a banking history. This initiative strives to create a favorable setting for MSMEs by funding their requirements and assisting them to establish a credit history. SBCorp also puts the P3 Program into action, which offers streamlined paperwork and quick processing.

ACPC’s Agri-Financing

The Agricultural Credit Policy Council (ACPC) has options to finance agricultural MSMEs. The given info doesn’t give specifics, but it’s smart to check out their programs if you work in agriculture. These loans backed by the government often give better terms than private lenders making them a good choice for small businesses in the Philippines.

Top Private Banks for Business Loans

When you want to fund your business in the Philippines several private banks have good options. Let’s look at what four big banks offer:

BDO

BDO’s SME Loan begins at ₱1 million and goes up to ₱20 million. This loan suits businesses looking to make big purchases like equipment or build offices. You can pay it back over one to ten years, with interest rates from 6.25% to 7.25%.

BPI

BPI offers Ka-Negosyo loans to help businesses grow. Their term loans start at ₱500,000, while franchising loans begin at ₱100,000. You can spread out payments over one to ten years. They also provide credit lines with a 4.50% interest rate for 90 days.

Metrobank

Metrobank has a range of SME loan options such as credit lines short-term, and long-term loans. They set a minimum loan amount of ₱500,000 and require collateral.

Security Bank

Security Bank gives SMEs Business Express Loans of up to ₱5 million without needing collateral. The process takes about five days, with loan periods from 12 to 36 months and interest rates beginning at 1.50%.

New Fintech Lenders Offering Fast Business Funding

If you need quick and flexible funding options new fintech lenders have come up with fresh ideas. These lenders use tech to make applying easier and to get you money faster.

First Circle

First Circle catches the eye with its Revolving Credit Line. It gives loans from ₱250,000 to ₱20 million without asking for collateral. You can enjoy interest rates that start at 0.99% each month. The approval takes two business days. To get a loan, your business must make at least ₱5 million a year and be registered.

Esquire Financing

Esquire Financing helps SMEs with loans up to ₱10 million. They don’t share many details. You can call them at (02) 8811-8888 to learn more about what they offer and how to apply.

Uploan

While we don’t have specific details about Uploan, you might want to check out their services as you look for quick business financing options in the Philippines.

Figuring Out Your Business Loan Needs

To decide if you need a business loan, take a look at your money situation and goals. Think about these main areas:

Cash Flow

Cash flow loans give you more money to work with on top of what you’re making. This boosts your buying power and helps your cash flow run smoother. They’re great for buying inventory, materials, or supplies. With these loans, you can take advantage of discounts on big orders and keep up with market changes.

Growing Your Business

When chances to get bigger come up, a loan can help you grow without messing up your day-to-day work. It covers the costs that come with growth making sure your business can expand without hiccups.

Equipment Purchase

Equipment financing has a focus on helping businesses get the machines they need. This loan type lets you update or swap out equipment without using up your cash.

Debt Consolidation

Though not listed in the main points, getting a business loan to combine debts can help you handle your current debts better.

Before you apply, check your money situation, including your Debt Service Coverage Ratio (DSCR) and credit score. Create a strong business plan to show how you’ll use the loan well.

Traditional Bank Loans vs Alternative Lenders

When you’re looking to finance your business, you’ll find two main choices: traditional bank loans and alternative lenders. Each has its own features and plus points.

Pros and Cons

Regular banks give out bigger loans with less interest and more time to pay back. They’re great for when you need a lot of money and want something steady. But get ready for tons of paperwork and tough rules to qualify.

Other lenders are more easygoing and quick to say yes. They work well for companies without much credit history or stuff to put up as collateral. The downside? They charge more interest and fees to cover their bigger risks.

Approval Rates

Banks don’t approve as many loans because their rules are so strict. They want top-notch credit and years of being in business. Other lenders approve more often working with new companies and those whose credit isn’t perfect.

Funding Speed

Traditional banks often need weeks or months to process loans. Different lenders use tech to speed up approvals often giving funds in a day. This makes them great for quick cash needs.

Getting Ready for a Strong Loan Application

To boost your loan approval odds, you need to put together a full application. Make sure all info is right and complete, like your current address and citizenship details. Any mix-ups can cause rejection.

Business Plan

A good business plan is key. It should have an executive summary, company overview, market analysis, and money projections. Lenders want to see that you know your market and have real goals for growth.

Financial Statements

Give comprehensive financial reports, including profit and loss statements, cash flow forecasts, and balance sheets. Include three to five years of past data if you have it, and predict future finances. This shows your company’s stability and potential to make money.

Collateral Documentation

For loans with security, get papers ready for your collateral, like property or cars. Keep in mind, lenders might take these assets if you can’t pay back the loan.

Getting Through the Approval Process

Credit Check

When you ask for a business loan, banks check your application through a credit review. They look at your personal and business credit scores how long you’ve been in business, your income, and your bank records. Your credit history has a big impact on this, as it shows how you handle your debts. Banks also think about things like your business type, industry, profit margins, and cash flow to decide if you can get a loan and how risky it might be to lend to you.

Site Visits

Even though the main points don’t say it outright, some lenders might want to visit your business as part of saying yes to your loan. These visits let lenders see your business operations and assets with their own eyes.

Negotiation Tips

To boost your approval odds, work on making your application stronger. Create a thorough business plan that shows your company can thrive and grow. Get your financial documents in order, including profit and loss statements and cash flow forecasts. Be prepared to offer collateral if needed. Before you talk to lenders, check your credit report and fix any problems. When you meet with them, be ready to talk about your business plan and how you’ll spend the loan money.

Managing Your Business Loan

To get the most out of your business loan, use the funds to build on your key strengths and don’t waste money on projects that won’t help much. Set aside some cash to upgrade your accounting systems and bring in financial experts if you need to. This gives you a clear view of how your business is doing , so you can make smart, data-based choices about growing your company.

Repayment Strategies

Think about making extra payments or one-time lump sums to cut down on interest. Keep your costs in check and use profits to pay off your loan. Talk to your lender about getting better terms if your business is doing better .

Refinancing Options

Refinancing can help you get better terms, like lower rates or more time to pay back. Look into different lenders, including banks, SBA lenders, and online options, to find what works best for you.

Early Repayment Considerations

Paying off your loan can save you money on interest, but watch out for fees for paying . Think about whether using money to pay off the loan is better than other ways to invest it. Make sure you keep enough cash on hand and emergency funds to stay stable.

FAQs

1. What are the usual interest rates for business loans in the Philippines?
Business loans without collateral in the Philippines have annual interest rates starting at 12% for amounts up to ₱10 million. If you put up collateral, the rates can drop to as low as 6.25% per year, and you might be able to borrow more than ₱20 million.

2. What type of loan is most beneficial for entrepreneurs?
Small businesses find the line-of-credit loan to be the most helpful. This short-term loan boosts the cash available in a business’s checking account up to a set limit. You pay interest on the money you use from the time you take it out until you pay it back.

3. Which banks are recommended for business loans in the Philippines?
If you’re looking to get a business loan in the Philippines, these banks are your best bet: UnionBank Bank of the Philippine Islands (BPI), Security Bank, Development Bank of the Philippines (DBP), Banco De Oro (BDO), Landbank, Metrobank, and Philippine National Bank (PNB).

4. Which bank in the Philippines offers personal loans with ease?
We don’t have an answer yet about which bank in the Philippines makes it easiest to get personal loans.