Philippines Home Loan Terms EVERY Buyer NEEDS TO Know
The requirements for a business loan are often quite strict regardless of what lender you choose.
You cannot use any loan for your startup. You must use a business loan for all business-related expenses.
There is a common misconception that bank loans take so long to get approved because banks are… well… slow. But that’s not necessarily the only reason your loan is delayed.
Loans are a huge financial commitment, and banks take a lot of risk in lending to borrowers. Part of the lending process is checking your documents for legitimacy and ensuring you can pay back what you’re loaned. But you’re also being checked for lies.
If you lie about what you’re using your loan for, it is highly likely you will get caught.
There are lots of different types of loans available on the market, so it might be best for you to find a lender that specialises in your chosen industry. For example, LandBank specialises in rural areas that do farming and offer tourism. You might prefer an agriculture loan from Security Bank. Or, getting a general SME loan (small to medium enterprise) might be easiest for you.
If you are a budding entrepreneur with dreams of owning your own business, you might be confused as to what loan you should get. You haven’t been in business for the minimum 3 years to qualify for a loan, but you can’t use a personal loan to get started, either.
The solution is to look for secured loans that require some sort of collateral, if you have any to spare. The collateral makes banks look more favourably upon you because there is less risk involved in lending to you. This is a very serious loan that means if your business is unsuccessful and you fail to pay back your loan, you forfeit your collateral to the bank to cover the costs of your loan.
You can also look into small loans like credit lines. These are short term loans that work in small amounts, essentially like a credit card. Credit lines can be used for all facets of your business, including payroll.
Private lenders may also be able to provide you with funding faster and with less document requirements, but be wary of these because of their high interest rates and large fees for missed repayments.
Entrepreneurs need to do their budget carefully and note down all their expenses before committing to a loan. 77% of 100 Filipino micro, small and medium-sized enterprises (MSMEs) surveyed by the cloud banking platform Mambu are unable to secure sufficient business funding. Of these businesses that lack funding, 48% went on to have cash flow issues, and 48% failed to launch new products.
The number one underestimated costs of a startup are legal fees like taxes, registering the business and collecting the relevant licences. So, in order to start your business off on the right foot, consider all fees you’ll have to pay before the exciting things like your commercial space, the inventory you’d stock and the services you’d offer.
Your best chance for success is budgeting for emergencies as well – if you can’t find a loan to help with your start up, then you’ll need to be in business for 3 years and profitable for at least 1 of those years in order to qualify for a loan from the bank.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The phrase “business loan” is an umbrella term used to refer to a loan that’s used specifically for your business’s benefit.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The requirements for a business loan are often quite strict regardless of what lender you choose.
The phrase “business loan” is an umbrella term used to refer to a loan that’s used specifically for your business’s benefit.