Business loans are funds provided by a bank, private lender and even government to a self-employed individual, small/medium business owners as well as big companies in accordance to a financial arrangement as agreed by concerned parties. It's also possible to get the money you need when you're an employed person but planning to start your own business.

Benefits of a Business Loan?

Business loans, if approved, can provide you with the much-needed funding to start a new venture or keep the operations going with sufficient cash flows. In short, you won't have to risk depleting your personal finances just to spend for business-related matters. You'll basically avoid mixing your personal and business finances together.

Specifically, business loans can help you in the following:

Obtain capital to start a new venture

Expand and grow your existing business

Obtain much-needed equipment or upgrade existing ones;

Pay for emergency expenses while still awaiting client's payment of receivables;

Who Is Eligible?

Not everyone who is planning to start a business in the Philippines can get approved for a business loan. Even those who are already doing business, there are factors for consideration.

In most cases, the banks' requirements for the eligibility of the business loan applicants include the following:

Must be between 21 to 70 years old when the loan matures;

Must be a Filipino citizen either by legalization or by birth;

If an entrepreneur, the business must be in operation for at least 3 years;

If an employed individual, he/she must have at least 1 year of tenure. Some banks also require that such individual is earning as low as P10,000.


The types of people who can apply for a business loan can also be categorized into the following:

Sole proprietors - individuals who have exclusive ownership over their business, which means they're solely responsible for any liabilities but also gets to keep all the profits after tax.

Corporations - groups of people who legally acts as one entity,

Self-employed individuals - are those who are working for themselves, including sole proprietors. This is also often used to refer to professionals and independent contractors such as doctors, dentists and engineers.

Types of Business Loans

There are different types of business loans. It is best for you to assess your current situation first to identify the most suitable financing agreement to apply for.

Working Capital

is basically a short-term loan for business to be used for expansion and growth, maintenance of sufficient cash levels, repaying other debts and/or dealing with emergencies.

Line of Credit

is a short-term loan agreement wherein the lender, usually a bank, funds the checking account of your business to a certain pre-agreed maximum amount. This arrangement lets you have greater control on your financial liabilities because you only take what you need and pay only for the interest of the amount you used. The term can range from 90 days to 1 year. The setup is only intended for the purchases related to everyday operations such as inventory and not of real estate and equipment.

Revolving Credit

is essentially a specific type of line of credit. It is also often referred to as revolving line of credit. What makes this different with other Line of Credit setup is that your available credit is replenished after you make payments as long as you haven't exceeded the maximum limit.

Online Loans

are basically business loans that you can get approved for as quickly as possible and lets you receive your funds in a few hours or days. In most cases, you'll have to deal with very high annual percentage rate as payment for the fast, convenient process and less complicated requirements.

Small Business Credit Card

is basically just like your personal card that provides you greater access to readily-available funds to pay for products and services necessary for your business. This small business card is tied to you and when you apply for it, your personal credit history will be the one assessed.

Corporate Credit Card

is different from the small business card in such a way that the account is tied to the company and not you as an individual. When applying for this card, it's the credit history as well as the major assets of the company that will be pulled out for assessment.

Merchant Cash Advance

is essentially getting cash or having purchasing power as high as around 125% of your business's monthly credit card sales. Repayment is easy because your credit card company will only take out the payments from your merchant account. This setup is ideal for those with high sales from credit card transactions such as retail shops and restaurants.

Inventory Loan

is taken out for the sole purpose of purchasing and acquiring inventory for the business


Equipment Loan

is for the acquisition of new equipment or for the repairs/upgrades of existing ones. In some cases, taking out this type of loan is easier because the equipment serves as collateral.

Philippine Banks That Offer Business Loans

Here's a quick list of the top banks you can check out when it comes to business loans.

Bank Name
Interest Rate


Term Loan - secured fixed-term loan facility

SME Ready Check - a secured revolving credit line

P1,000,000 to P20 Million, depending on the appraised value of your collateral

as low as 7% APR for 1-year fixing period

1 to 10 years



JPMorgan Chase

business term loan

business line of credit

equipment financing

trade financing

business credit cards

minimum of $5,000 (for business term loans)

min of $10,000 for business lines of credit

max of 100% equipment financing





United Coconut Planters Bank (UCPB)

small business loan

P500,000 to P15,000,000.


promissory note line - one year revolving line

construction of warehouse - min 1 year term loan

office expansion - max 10 years term loan

franchising loan - max of 10 years



Development Bank of the Philippines (DBP)

Sustainable Enterprises for Economic Development (SEED) – for micro, small and medium enterprises

Tree Plantation Financing Program (TPFP) – financing for entrepreneurs in the forestry sector.

Sustainable Agribusiness Financing Program (SAFP) – for those in agribusiness

max of 90% of project cost

prevailing market rates

max of 10 years, depending on type of loan;

max of 15 years for Tree Plantation Financing




SME Term Loan – ideal for purchasing new property or equipment

SME Credit Line – to increase working capital for day-to-day operations

P1 Million to P20 Million

At "competitive" rates

Short Term - 360 days

Long Term - max of 7 years

Credit Line - 1 year


15 banking days

Philippine National Bank

Short and Long Term Loans

Credit Lines

Specialized Lending Programs

Trade Services and Finance

Sugar Loans Program

Small Business Loan Program

Small Business Loan Program – max of PHP 10 million


Short Term – max of 1 year

Long Term – 2 to 7 years.

Specialized Lending Programs – max of 20 years.

Small Business Loan Program – 1 to 5 years



Other banks you can possibly approach are the following:

Bank Name
Other Notes

Security Bank

Contract to Sell (CTS) Financing

Floor Stock Financing

Back-to-Back Loans

Purchase of Receivables

Capital Expenditure

Specialized Lending

Working Capital

Project Finance


Land Bank

ASENSO Program – A financing setup for entrepreneurs in agri-business, trading and manufacturing.

Integrated Support for the Development of Aquaculture (ISDA) Program – A credit option for NGOs, SMEs, cooperatives and large agri-business organizations.

Kalikasang Kabuhayan para sa Wastong PamaYanan (KAWAYAN) Program – ideal for farmers and agri-business owners livelihood associations and cooperatives.

Microfinance Program for Microfinance Institution-Retailers –for micro-business enterprises in barangays and other poor sectors.

OFW Reintegration Program (OFW-RP) – A credit option for OFWs seeking to establish a business back in the home country.

OFW-RP offers P 300,000 to P 2 million


Short-term Working Capital Loan

Long-term Loan

Loan Line

Omnibus Line

Receivable Purchase Loan

Domestic Letters of Credit Trust Receipts

Discounting of Post Dated Checks

Import Letters of Credit

Export Bills Purchased

Export Advances and Loans

Long-term Working Capital Loan

Project Based Financing


Standard Chartered Bank

Cash Secured Loans and Bills Purchase facility



Long and Medium Term Loans

Pre-Delivery and Post-Delivery Financing

Export Advance and Foreign Bills Purchase Facility

Trust Receipt Financing

Import and Domestic Letters of Credit

Revolving Credit Line

Standby Letters of Credit

SME Loans for Women


Asia United Bank (AUB)

short term loan, long term loan, Domestic Bill Purchase Line, Foreign Bill Purchase Line and PDC Discounting line


Philtrust Bank

business loan


Bank of Commerce

business loans and lines of credit, SBA (Small Business Administration) loans, agricultural loans and business real estate loans


Mizuho Bank




Citi Ready Credit is generally not a business loan. It's a credit line that lets you access cash through installment loan or cash advance.

Maximum standby line of credit of Php2 Million with no annual fee.

Standard Chartered Bank Philippines

Cash Secured Loans and Bills Purchase facility


Deutsche Bank

Offers a wide range of business loans to suit individual need.


Hongkong and Shanghai Banking Corporation (HSBC)

short- and long-term HSBC business loans

revolving loans

term loans or customized programs



Short Term Working Capital Loan Line

Long Term Secured Loan

Trade Check Discounting Line

Trade Finance Receivable Line

Letter of Credit/Trust Receipt Line

Domestic Bills Purchase Line



Loans are mostly intended for SMEs. These include: short-term and long-term loans, syndicated financing, multi-purpose credit line or omnibus facility, discounting facility, or domestic bills purchase line.


Bank of Tokyo-Mitsubishi UFJ

Project, export credit, ship and real estate financing

Company acquisition loans (LBO/MBO)

Project finance and syndicated loans


Robinson’s Bank

SUPERLoan ng Bayan is offered specifically for those venturing into small to medium enterprises

Offers fixed interest of 3% a month, which is much lower than most banks and financial establishments.

Philippine Veterans Bank (PVB)

Loan and bond arrangement

Business capital structuring services


Bangkok Bank

term loans, fixed loans, and revolving short-term loans


Malayan Banking Berhad (Maybank)

Term Loan

Contract-to-Sell financing scheme for real estate developers

Developmental Loan for real estate developers

Check Discounting Line

Revolving Credit Line

Domestic Bills Purchase Line

Loans Against Hold-out Deposits


Here are your options when it comes to Private Lenders and Government-backed business loans.

Bank Name
Interest Rate

Global Dominion Financing Incorporated (GDFI)

Business loan

P25,000 to P100,000

as low as 2.5%

3 to 12 months



ING Group

Has a wide range of financing solutions for businesses including acquisition financing, mergers, debt capital markets, corporate/industry lending, trade finances services and working capital solutions.




Co-maker needed


Asialink Finance Corporation

Business/Corporate Loan

Cart Franchise Loan

Doctors Loan

Medical Professional Loan






Esquire Financing

Business loans

P100,000 to P10,000,000

depends on approval

depends on approval


7 business days

Vidalia Lending

Business loan and E-Commerce loan

P10,000.00 to P100,000.00

2% to 5% monthly

flexible payment terms to as long as 12 months

Co-Borrower needed

1 to 2 days

Capital Union

Business loans

P100,000 to P1,000,000

1% to 7% monthly

flexible repayment terms are available


5 – 7 working days


Business Development Loan Facility

Social Development Loan Facility

Fixed-Term Credit Facility

ASENSO Program (Access of Small Enterprises to Sound Lending Opportunities)

Business/Social Development and ASENSO - Maximum of P500.00 million

Fixed-Term Credit - max of 80% of approved omnibus credit line of provident funds (net of availments)

prevailing rates

Business/Social Development - 5 to 15 years

ASENSO Long Term - 5 years

ASENSO Short Term - 1 year

Fixed-Term Credit - 5 to 15 years; special projects may have max of 25 years



Loan Comparison: Bank vs. Private Lender vs. Government

When it comes to business loans, people will immediately consider going to the bank because it is perceived to provide a much lower interest rate compared to a private lender. The reason banks can provide loans to qualified applicants at a lower annual percentage rate is because it has a lot of sources for funding, thanks to the thousands and even millions of depositors who they only give an annual interest income of around 2.5% versus the approximately 6% charged against borrowers. On the contrary, private lenders generally operate as a lending business and only rely on investors who want to see high returns.


In most cases, you won't see much of a gap between the interest rates offered by the banks and the private lenders. Even if the low cost will allow banks to offer business loans at a potentially low rate, these institutions may drive their interest rates higher but a bit lower than the average rates offered by private lenders. In this way, you will still perceive banks as a great source of low-interest loan rates. It doesn't matter for banks if you won't find their bank loans attractive though, as the establishments have many other sources of income in their portfolio, unlike private lenders whose business solely exists to provide loans.

Business loans are also available through government-backed programs or through government agencies such as GSIS and SSS. Many of these loans are for micro-financing schemes, which are ideal for the small-time Filipino entrepreneur like those venturing into the agricultural sector, those setting up business in markets as well as those making handicrafts or producing native products. Government loans for medium and small businesses are also available.

It's a great time for every Filipino to venture into entrepreneurship because of  President Rodrigo Duterte's many economic policies that highly support micro, small and medium enterprises (MSMEs).  The President has also stated he wants to stop the high-interest "5-6" financing scheme that is said to "kill" the Filipinos' entrepreneurial spirit

What Are The Requirements?

Documentary requirements for the application of business loans vary from one establishment to another. They also depend on the kind of financing agreement you want to enter into as well as the nature of your business. To be safe, it's best to prepare for the following documents:

General Requirements

Completely filled out application form

Income Tax Return for the past 2 years - this will serve as your proof of income to give banks assurance that you're capable of making repayments;

Valid IDs with details that match those disclosed in the loan application form - this will serve as your proof of identity

Residence certificate or any proof of residence - needed to ensure that you actually have a place to stay and not just a transient from one place to another.

Documents related to collateral, if necessary


Additional for employed individuals

Payslip(s) for a full month - will also serve as proof of income

Latest employment history statement - to provide banks a sense of assurance regarding your stability as an income-generating individual

Certificate of employment with details on compensation

For OFW - include employment contract and proof of remittances for the past 3 months

Additional for current business owners

Audited financial statement for the past 2 years - to help assess the creditworthiness of your business

Bank statements with details of the last 6 months

Registration documents from SEC or DTI - serves as proof that your company is legally registered

Mayor's permit - serves as proof that you have the right to do business

List of customers and suppliers

For corporations - include registration documents such as Articles of Incorporation, Secretary's Certificate and By-laws, etc.

Additional for self-employed individuals (e.g. doctors, dentists, veterinarians etc.)

Proof of private practice for at least 1 year

Clinic address(es) and schedule(s), if applicable

List of clients and/or suppliers

What Lenders Look At To Approve Your Loan?

Here are some of the areas that lenders will assess to determine whether or not to approve your business loan.

Credit history and score

Especially when you're seeking funding as a sole proprietor or for an MSME, your personal records will be pulled out. If you have too many missed payments and other financial red flags in your history, lenders might be hesitant to provide you with funding.

Debt to income ratio

Especially for business owners, the audited financial statements will reveal how your existing financial liabilities fare against your income. Your credit record will also be assessed because it basically details your payment history on mortgage, car loans and credit cards, if any. If the ratio is goes beyond 50%, you might have a hard time getting approved for loans with favorable terms.

Stability of income sources

This can be assessed with the applicant's work/business history and income-related documents, among others.

Collateral value

In many cases, the approval of how much loan is given will depend on the assessment of the value of the collateral, whether it's a real estate, equipment or investment portfolio.

Calculating True Cost of A Business Loan

The loan amount that you have to repay and the additional interest charges are not the only calculations to look into when identifying the perfect loan agreement to enter into. When assessing your options, you must also take into consideration the other fees, such as:

Origination Fee

the amount charged by the lender for the processing of your loan application and other associated administrative tasks performed. This is usually a percentage (%) of the original loan amount and is to be paid up front. This can also be a flat fee.

Application Fee

is basically included in the origination fee to pay for costs related to processing your application for funding.

Guarantee Fee

is usually passed on partially by the lender to a borrower. This is the amount lenders have to pay the government or related organization for the guarantee provided on loans.

Late Payment Fee

is a finance charge that must be paid when you're unable to pay the minimum monthly payable related to the loan on or before the due date.

Business Loan Tools

Tools are available to help you plan your monthly business budget and cash flows with your financial liabilities taken into consideration. Here are two of the most important ones that you must use:

Loan Calculator

helps you determine the monthly repayments you need to make for your loan. You'll only need to enter the loan amount, the interest rate and the duration of the loan in months or years.

Loan Amortization Schedule

provides the month-to-month details associated with your loan repayments including how much of your payments will be for the interest and for the principal as well as the running balance.

Questions To Ask Yourself Before Getting a Loan

How much money do you need?

You must be able to create a budgeting plan for your business to determine how much loan you need to apply for. But no matter how much it will be, realize that the final amount you can get approved for will depend on the bank's assessment of your creditworthiness.

What do you need the money for?

You might need millions of pesos to start a new venture in addition to your existing one(s) or perhaps you just need thousands to invest in upgraded equipment that can help move your business forward. Whatever it is, make sure you're consistent when explaining your financial needs to your potential lender.

How quickly do you need the money?

Bank loans can be acquired in a matter of hours to several weeks, depending on various factors. Will you need the funds for expected cash shortages in the foreseeable future or are you in dire need of money now to save your business from bankruptcy?

How long will it take you to pay it back?

Look into the loan terms offered by potential lenders to find the financing setup that suits your business. Most importantly, obtain the amortization schedule to help you create a more realistic budget plan.

How long have you been in business?

Take note that in most cases, lenders prefer that your business has been up and running (and preferably has been profitable) for at least 2 years.

What is the current financial shape of your business?

You might want to look into your financial statement to compute for your debt to income ratio. It's essentially your monthly financial liabilities (except mortgage) divided by your total monthly income. Hopefully the ratio doesn't go beyond 50%

How much collateral, if any, do you have to put up for the loan?

Most business loans are only available for applicants who have any asset to serve as collateral. So what do you have? Also, if approved, your loan will depend on the value of the asset presented. Specific documents may also be asked depending on the nature of the business, such as a floor or building plan for those seeking construction business loan.

Do you have more questions? Book an Online Consultation with our Loan Advisers or check out our FAQ.