Short Term Business Loan
A business loan is money that you borrow from an institution for business purposes. In many cases, people loan to add funds for their newly established business or business that they are about to put up.
There are many types of small business loans, not all of them come in the form of direct financing. In the Philippines, the most common source of loans is banks. However, this is not the only source of loan. There are many others, which we will discuss today. Business loans, like other loan types, have an interest. The interest rate varies between banks and the amount of your loan.
Today, you will learn about the different types of business loans, where to get them, and how much interest you can expect. By the end of this tutorial for business loans in the Philippines, you will be able to make an informed decision about borrowing money for your business. Check out each of our recommendations and then list down the different requirements, loan maximum, and interest rates. This should help you in deciding the best loan type for your business and where to get it.
Can I Take a Business Loan at Robocash?
Robocash is an online fast loan company that offers quick cash to those who need it. Right now, it does not offer online business loans in the Philippines. However, this does not mean that you cannot borrow money from this company. You can still borrow money.
The thing with Robocash is that it offers loans no matter why you need it. However, you can only borrow small amounts, like between ₱1,000 and ₱25,000. This loan has to be paid soon, including the interest. You can use this loan to pay for goods, materials, utilities, and so much more.
To be able to get a loan from Robocash, you have to be a Filipino citizen, between 21 and 70 years of age. You should also be employed or have business, and provide documents proving your residence, age, citizenship, and your capacity to pay. You can do this by scanning and sending documents like credit card statement certificate of employment, income tax returns, and government ID.
Once you have supplied all of this, the company can take as little as 24 hours to approve or deny your application. Everything is online so you do not have to queue for the application process.
Types of Business Loans
There are different types of cash loans for business, and you have to choose the best one that will help you grow your business.
A term loan is a kind of loan that you pay over the long term. Usually, this is a big loan that you can pay for 12, 24, or 36 months. It is a little difficult to get approved for a term loan because of the size of what you are going to borrow.
You can get a term loan from a bank. The most common minimum loan requirement is at least ₱100,000. Term loans also have high interest rates.
A credit line is a loan where you receive a credit card. You can use this credit card for buying materials for your business. It functions as a credit card, but this is a kind of card that really has a high credit limit.
This credit line also has a huge interest rate, and you have to pay what you owe by the time it is due. If you fail to do so, you will pay several types of fees. On some occasions, a credit line is not a card, but rather a fixed arrangement between banks and businesses. For example, you may have a credit line in a gasoline station to put petrol in your fleet of trucks. The gasoline station charges the bank for your petrol use, and then you pay the bank.
Secured Business Loans
A secured business loan is like a term loan. However, you need to give the bank a collateral. It means that the amount of what you borrow is only equal to the price of your asset.
A collateral can be a car, a lot, a house, or anything that has financial value. You can use your sticks and bonds as collateral if you want. With this type of loan, the bank will seize your asset if you fail to pay your business capital small loan.
Unsecured Business Loans
This is a business loan in the Philippines without any collateral. It is like a term loan, but you do not have to risk your asset. Most of the time, unsecured business loans are small, not more than a million pesos or so. Unsecured loans can be paid monthly, and you will also pay interest.
Where Can I Get a Business Loan?
There are two main methods you can try if you need a loan to start up your business in the Philippines. These are banks and government loans.
Banks – you need to be employed or your business should already be established. In some cases, banks will approve your loan provided that you already own at least 20% of your target capital. With banks, you will have to choose your payment terms, and you need to pay interest. The average interest rate is 15% per year.
Government business loans – you can get small business loans in the Philippines from the government. One government department where you can borrow money is the Department of Trade and Industry or DTI.
Annually, DTI sets aside a budget of ₱1 billion or more for loans. These loans are given to micro businesses only. The owner of the company may issue a business capital small loan. It means that the asset amount must be less than ₱3 million. The interest is only 0.5%. To be able to apply for this loan, your business must have already existed for at least one year by the time of your application.Apply now
Why do I need a Business Loan?
What are the reasons for getting a business loan? Why not just save money and then start your business once you have the capital?
The main purpose of getting a loan is time. It is better to start a loan now when the prices of goods are still low. Here are the other reasons why entrepreneurs need a small business capital loan in the Philippines:
- To expand your business – if your business is earning, it is going to take some time to be able to save money to build a new branch. Businesspeople who are confident of their performance need a loan so they can establish a new branch. It is in this case small business capital loan will help you. If this happens, they can earn more money, and then pay their loans faster.
- To improve cash flow – some businesses are strapped for cash, especially those whose success is seasonal. For example, crop and animal farmers do not earn a lot of money the whole year. They need to add cash to their business while waiting for the crops or animals to grow. Then, they can pay for the loan once they have sold their products.
- To invest in better marketing strategies – some businesses need to invest in advertising. If they do not have enough funds to do this, they need money. For example, you need money to pay graphic artists and social media experts. In this regard, you need to borrow from banks and other business institutions, so you have enough budget for your marketing.
- To prepare your business for a large wholesale order. For example, the holidays are coming, and you need to buy 3 times more products for holiday dishes to sell them in a profitable way. You can also use a small business capital loan for this purpose, and then pay it off when you make a profit.
- To finance daily business expenses, such as wages, rent and operating expenses during periods of low demand, reduced sales or lockdown.
Different businesses have different reasons to borrow money. Whatever the reason is, the financial institution will approve you if you have a good financial record.
Business Loan Requirements
Here are the general requirements for filing a business loan for both banks and government loans for small businesses in the Philippines.
- DTI registration – document showing that your business is approved by either DTI or the Securities and Exchange Commission.
- Bureau of Internal Revenue registration – you will be able to get this once you have a Mayor’s Permit.
- Mayor’s permit – secure this from your municipality Office of the Mayor.
- Income Tax Return (ITR) – this is not required if your business is not operating yet.
- Proof of identity – government valid IDs.
- Proof of income – show your ITR or proof of cash; you can also show proof of employment and pay slips.
- Proof of address and citizenship
If you are applying for a loan that requires collateral, you need to submit proof of ownership of your asset. Your asset must already be paid in full. For example, you cannot file for a loan and use your car as a collateral if you are still paying the amortization for that.
Business loans are important for an economy. Without a business loan, many entrepreneurs who have great ideas will never be able to put up their businesses. Before you apply for a business loan, take the time to study how much you can get from an institution, what the interest rates are, and how long you can pay. If you need only a small amount of money, do not go to banks. Go to online institutions where you can get a loan in as short as 24 hours, and then pay it in 30 days.Apply now
RyanRobocash is one of a kind. They are true to their commitment that once u pass d review they will credit the loaned amount right away! In less than 5 mins we got the money transfered to my gf bank account. Amazing! Two thumbs up ROBOCASH!!!
EricaI tried Robocash out of curiosity. To cut to the chase, Robocash is ideal for "petsa de peligro" days where it's almost payday but also your bills is on due date because they have short payment terms (I was given 7 days term for my first loan). You can get approved as fast as 30mins and the loan will reflect immediately.
SamI loved RoboCash not just the app but for the whole experienced that I had in applying for a loan. Hassle free and loan disbursement is as quick counting 1-2-3.