Business loan in the Philippines

Business loan in the Philippines

Business loan is a service that can be used by both a beginning entrepreneur and a company with a certain commercial experience. Such loan in the Philippines is provided by public and private institutions. Participation in government programs is more suitable for small organizations. Representatives of medium-sized businesses usually have to register loans in bank.

PERSONAL AND BUSINESS LOANS IN METRO MANILA
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Monily

Monily

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interest rate
for 1% per day
PHP 2000 - 20000
from 65 to 90 days
(5/5) 498 voice
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Robocash PH

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interest rate
for 2,18 % per day
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from 7 to 30 days
(4.98/5) 1342 voice
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Cashwagon

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interest rate
for 2% per day
PHP 2000 - 20000
from 10 to 30 days
(4.11/5) 398 voice
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Cash Mart

Cash Mart

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interest rate
for 0,8% - 3,5% per day
PHP 5000 - 30000
from 7 to 30 days
(4.33/5) 489 voice

Advantages of Business loan

Small and medium-sized enterprises around the world are developing by means of borrowed funds. Raising extra money allows:

  • to get the necessary seed capital;
  • to expand production and trade infrastructure;
  • to modernize the material and technical base in accordance with the requirements of the modern market;
  • to take advantageous orders, without using basic resources.

Paying off your debts in a honest manner, you improve your credit history. This means that subsequent loans can be obtained on more favorable terms.

The advantages and disadvantages of quick loan without collateral

This option of a commercial loan implies the following advantages in comparison with a typical loan:

  • an acceptable way for borrowers who do not have assets for collateral;
  • lack of real estate valuation, other lengthy and complex procedures;
  • easy approval, quick acceptance of positive decisions on issuing a loan in standard situations.

Relevant programs are offered on the market with slightly lower interest rates than in conventional bank cards. For objectivity, a few drawbacks should be noted:

  • borrower’s check is performed more carefully, as additional guarantees of return are required;
  • the contract is drawn up with increased penalties for non-fulfillment of the commitments;
  • interest rates are set higher than in the case of collateral.


Business loan in the PhilippinesWhere is it better to take a Business loan

A loan to support or open a business, like any loan, is given at interest. This indicator in different organizations can be radically different. In the Philippines, you can be offered a loan both at 5.5% per annum, and at 20% per month (360% per year). The choice is very wide, so you can select the solution that best suits you due to the interest rate and the terms of loan repayment. Those wishing to obtain Business loan in the Philippines can use:

  • government program P3;
  • credit offers for participants of the SSS system;
  • services of a commercial bank.

P3 Program

Business loan in the PhilippinesThe state loan under the program “Pondo sa Pagbabago at Pag-asenso” (P3) is available from the beginning of 2017. This offer is for registered small companies. To obtain a loan, you do not need a deposit. From the documents you need only the identity of the borrower, a certificate in good order and a work permit. You can get a Business loan under this program in any partner institution P3. History of the company Bulaklak: We applied for a loan P3. The answer was received within two days (the maximum period is three). The loan is issued for 3 months with a weekly repayment. We managed to get 80 thousand Php (Philippine pesos) at 2% per month (the maximum rates are 100 thousand Php and 2.5%). We are satisfied with the cooperation, so that will address them further if necessary. The interest rate here is much more favorable than in companies of instant microcredits.

Loan from SSS

Business loan in the PhilippinesIf you need a larger amount, you can get it by becoming a member of the Social Security System (SSS). Members of this organization are offered several options of Business loans. Beginners can apply to the bank – participant of the ASENSO program or to the development credit fund. In the first case, you can expect an amount of up to 5 million Php. The term of monthly payments is from 1 to 5 years. In the business development fund, you can get up to 500 million Php. The maximum repayment period is 15 years with monthly, semi-annual, quarterly or annual payments. The interest rate and the requirements for securing a loan depend on the particular financial institution cooperating with the SSS. This category includes banks: BDO, DBP, land, development of the Philippines, veteran, etc.
History of the company Building materials: We took a loan of ASENSO in the Philippine Development Bank for the purchase of equipment. In 2017, our company had negative time, but thanks to previous successful years, no problems arose. The loan is long-term, at this stage the parties are satisfied with each other. If your organization is also a member of SSS, this option deserves consideration.

BDO

The bank issues loans for the development of small, medium and large businesses. The limit is up to 20,000,000 pesos. Interest rate:

  • 1 year – 7%;
  • 2 years – 7%;
  • 3 years – 7%
  • 4 years – 8,5%
  • 5 years – 8,5%.

The age of the candidate is from 21 to 65 years. Maximum payment period – 5 years.

PAG-IBIG Fund

Business loan in the PhilippinesPAG-IBIG Fund instantly issues commercial loans to a card called “a loan for various purposes”. This category also includes a business loan. The bank has the following cash limits:

  • loan for 24-59 months – up to 60% of the total profitability of the enterprise;
  • loan for 60-120 months – up to 70% of the total profitability of the enterprise;
  • loan for 121 months and more – up to 80% of the total profitability of the enterprise.

Interest rate – 10.75%. Age of the candidate – from 21 to 65 years.

Business loan in the PhilippinesBPI

The bank cooperates with investors, start-up and experienced entrepreneurs, buyers and industrial businessmen. The minimum repayment period is 2 years, the limit is 10 years. Here you can borrow from 500,000 pesos. Interest rate – from 5.5 to 9% (for small business – up to 11%).

SSS

The organization is disposed to cooperate with entrepreneurs, providing a credit limit of up to 5,000,000 pesos, for a period of up to 15 years. Interest rate is determined individually. Standard loan terms.

Business loan in the PhilippinesMetroBank

The bank issues for business development from 1,000,000 to 20,000,000 pesos. MetroBank prefers to issue a loan on bail – property or documentary. The term of payment is up to 7 years. The bank rarely cooperates with startupers and microbusiness owners, because it is impossible to borrow less than 1 million here.

Business loan in the PhilippinesSecurity Bank

The credit limit in this bank is 5,000,000 pesos, the minimum loan must not be less than 1,000,000 pesos. The bank issues a loan for a period of 12, 36 and 48 months. The interest rate ranges from 1.5-1.9%. In addition to the principal debt, the borrower pays a fee for banking services: an average of 2,000 pesos one-time (the exact amount is agreed with the bank employee).

PSPBank

The crediting minimum of this organization is 2,000,000 pesos, for business here are offered ideal lending conditions: approval takes 15–20 days, debt can be repaid within 365 days. The interest rate is agreed individually.

Business loan in the PhilippinesRCBC

The bank issues a loan for business development to borrowers aged from 21 to 70 years. Payment period – from 1 year to 5 years. The minimum loan to a bank card is 1,000,000 pesos. So that a bank will give approval for a loan, you need to run a business, be an investor or partner of Philippine companies for at least 2 years.

Loan in a commercial bank

Business loan in the PhilippinesIf for some reasons you can not cooperate with the social security system, it’s always possible to apply for a commercial structure. The disadvantage of this decision is the need for a serious collateral (exceptions are extremely rare). Otherwise, this option looks quite practical. You can take a Business loan in the amount of 100 thousand to 20 million Php and above. The standard interest rate is from 5.5 to 11% per annum. You can apply to the nearest branch of the bank or send a form via Internet. In the latter case, you need to scan the required documents. The processing of the application usually takes from 7 to 10 business days.
History of the company Green World: We registered a three-year loan Prime Rebate in PSBank for 4 million Php. This is not our first cooperation with these organizations, but before we used the line of business lending. I would like highlight the possibility of making payments before the deadline and in a larger amount. Some creditors fine for this, here you can get bonuses.

Requirements to a borrower to obtain a commercial loan

The decision is not immediately taken by the responsible employees of the bank. But you can speed up the procedure. For this purpose, besides the application, it is necessary to prepare the accompanying documents. The exact list is published on the official website of the lender. The following list shows the typical requirements:Business loan in the Philippines

  • passport, other documents for personal identification;
  • registration documents and general information about the company;
  • credit application which filled in the prescribed form;
  • photocopies of financial statements for 1-3 years;
  • confirmation (copy) of income tax payment for 1-3 years;
  • bank account statement for 6-12 months;
  • development plan of commercial activity;
  • certificate of employment;
  • certificates of absence of tax claims;
  • confirmation of receipt of salary, dividend payments and other regular income.

In any case, a proper assessment of your own financial capabilities is useful. For a quick check, banks offer specialized calculators that show the schedule for repaying the principal and interest monthly. In the calculation part of the application, it is necessary to show how payments are planned on the basis of the expected profit, taking into account current mandatory expenses.

Processing of applications is free. Additional costs are possible only with notarization of certain documents.

How to make a loan to be approved

Business loan in the PhilippinesIt is not difficult to get a loan instantly if you have a positive credit history. In the Philippines, there is no single federal-level mechanism that allows you to automatically calculate the reliability of a potential borrower. Here, banks and other lending institutions are guided by internal corporate rules.

Since 2011, the centralized specialized bureau TransUnion has been operating. Its database is used by partner banks. It accumulates the following information:

 

  • identification information;
  • history of payments on issued loans;
  • published records that can affect the issuance of a loan (court decisions, bankruptcies, etc.);
  • contested information;
  • list of requests for obtaining a credit history.

You must understand that the information from this database is not determinative. However, a good credit history significantly increases the chances of approval of the application. To get a loan without any problems, use the following recommendations:

  • Control the amount of debt. The optimum is not more than 30% of the established limit.
  • Pay interest regularly. Not considered to be a significant error delay up to 30 days.
  • Check and eliminate identified inaccuracies in your own credit history.

A positive factor is a long-term relationship with the bank. Accurate multi-year payments on a small finance loan are estimated higher than insufficiently accurate fulfillment of obligations on a large loan.

Repayment Terms of Business loan

Business loan in the Philippines

If a company has an opportunity to return the debt to the bank immediately, it’s possible to do it without any penalties. It is known that many microfinance institutions (MFIs), specializing in instant loans, make restrictions on early repayment of the debt in the contract. Banks do not have the right to do it under the law. For sure, creditors don’t like when the credit is repaid in advance, as they lose their planned income on interest and services. However, this is their problem. Your task is to study carefully the relevant clauses of the contract (it is recommended to do this before formalizing a business loan). If it is written that you are obliged to warn the institution of the intention to pay early, contact the nearest branch with a statement. With due legal care and accuracy, client will not face special problems. The real trouble can appear, if the borrower does not pay within the specified terms.

How to return a loan

Business loan in the PhilippinesIt is necessary to carefully read the terms of the contract to eliminate errors and penalties associated with them. The loan can be repaid in the following ways:

  • equal payments;
  • together with interest on a set time schedule.

In the second option, the debt gradually decreases together with regular payments. Early repayment of a loan without compensation to the bank of financial losses is permissible only if there is a corresponding clause in the loan agreement. In some cases, this opportunity is provided only after a certain time of using a loan.

 

Conditions for obtaining a loan

To ensure the return of a loan issued the Philippine banks accept residential and commercial real estate, vehicles, deposits. Collateral is estimated by standard methods taking into account possible loss of cost. In some situations, compulsory insurance is applied.

To get start up business loans, you can use a loan without collateral. According to statistics, these are the most popular programs. They are intended for the amounts from 10 thousand to 1 million PHP, terms from 12 to 36 months. Interest rates: 1.2-2.5%. When choosing a loan of this type, it is necessary to prepare documentary evidence of solvency.

If necessary, you can get a loan even without an existing bank account. In this case, the risk to the lender increases, so interest rates rise significantly. The lack of history complicates objective verification. Such loans are issued for a short period of time. For a positive decision is better to prepare the appropriate collateral. Nowadays, in addition to traditional types of collateral, some banks accept cryptocurrencies.

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