It is pointless to deny the fact that financial injections significantly accelerate business development.
So, you are an entrepreneur and decided to expand your business or open a new one. After market research and economic calculations, you decide that it is profitable for you to take a business loan and implement the project as soon as possible.
Where to get the money?
In the Philippines, there are government programs to support entrepreneurs, but they usually have a number of stringent restrictions and not all entrepreneurs can be selected to participate in these programs.
There are loans provided by crowdfunding platforms in the Philippines, such as Spark. This is a crowdfunding website where entrepreneurs can submit their projects and, when approved, they will be listed on the website. After that, investors will decide to invest in your project or not.
Since not everyone has time to expect funding through crowdfunding platforms, the traditional option remains – bank loans.
All major banks provide business loans. There are 2 groups of loans:
• Credit for large enterprises
• SME business loans.
A loan for a large business differs in the size of the loan, often longer, and in 80% of cases, these loans are secured by land, real estate or capital goods.
SME business loans differ in more modest amounts; their term usually does not exceed 5 years. And an additional significant advantage of these loans is the possibility of a loan without collateral.
Collateralized loans have a lower interest rate than loans without collateral. Depending on the loan term, the interest rate on secured loans ranges from 6.5% to 35% per annum. Naturally, large banks, such as BDO, offer more favorable conditions.
However, all bank loans have one peculiarity; the loan approval period is 7-21 days. That in some situations involving the rapid replenishment of working capital is unacceptable.
Then Payday lenders will come to your aid.
On a cursory counting business loans I provide about 30 banks and 4 payday lenders. How to quickly evaluate all offers? You can use the site aggregator Upfinance.
Here are all the legal financial institutions that issue business loans and you can compare their offers.
Payday lenders issue short-term loans. Their distinguishing feature is a high interest rate and a short approval period. Interest rates for business loans range from 2% to 30% per month. Loan terms can be from 6 months to 2 years.