There can be a lot of confusion and stress when it comes to looking for the best bank loan for your business. With countless financial institutions to choose from, it can become more difficult to get results when you need them most. However, it remains important to give serious consideration to your finances to ensure your business can develop and thrive. The best way to begin your search for the best bank loan for your business is to start reading through this article! We’ll give you a gist of the best banks and their features to guide you through!
Types of Loans
Your intended use for the company can readily determine the optimal loan type for your business. For example, term loans frequently offer larger sums than credit lines, making them ideal for long-term objectives or substantial one-time expenditures. The drawback is that most lenders have lengthy processing, especially when the evaluation of collaterals is involved. Bank interest rates often differ based on need and financial capability for repayment and market changes.
Another type of loan is called a credit loan. These loans often come without collaterals and are better suitable for short-term objectives like filling in cash flow shortages, addressing office repairs, or building up inventory. The third type of loan we’ll be discussing today is called a secured loan. This type of loan often requires collateral as a valued item that attests to your capacity to repay lenders. They are considered riskier than credit and term loans, as there is a chance that you could lose your collateral if you can’t pay off your loan. This type of loan, however, provides a larger amount and offers a cheaper interest rate.
- Term Loans – A type of loan that disburses money faster and can be repaid with a longer-term duration. This type often requires collateral.
- Credit Loans – A type of loan that gives you access to a “credit limit” which you can borrow and repay an interest of a portion of the credit limit you loaned.
- Unsecured Loans – A type of loan similar to a term or credit loan that does not require collateral. This type often has shorter repayment periods, higher interest rates, and smaller loanable amounts.
- Secured Loans – A type of loan that requires collateral such as valuable assets (real estate, automobiles, business properties, etc.)
Choosing the Right Bank for Your Loan
One of the most important aspects to remember when choosing a bank where you’ll be taking out your loan is accessibility. Consider how the bank conducts its process of applying for loans and the timelines that come with repayments. Finding the ideal bank where you will take out a loan entails patience. Assess the matters that you will use the loan for and how you can pay for the loan. As you go through each application process in your research, comprehend the terms and conditions of each loan you are choosing between.
There are banks that offer lower interest rates for repayment than others, so make sure to check out which banks come with the best offer. While you’re at it, be sure to include all the necessary information and supplementary documents you will be required to submit for your application. These documents may include collaterals, business registration, government permits, proof of income, and the like.
How Do I Qualify for a Business Loan?
Lenders such as banks and financial institutions often only work with companies that have shown stability or success for a few years. By establishing your business before taking out a loan, the likelihood of qualifying for a business loan can increase. Some loans are not available for startups or small businesses that have not yet established their company. However, some government organizations, such as the Department of Trade and Industry, offer business grants that are designed for new businesses and startups. These grants don’t require any collateral, unlike loans. Grants serve the purpose of providing financial support for entrepreneurs who want to create a business venture.
| Bank | Loanable Amount | Interest Rate |
| BDO SME Ready Check | Php 3M to Php 50M | Starts at 7% |
| BPI Ka-Negosyo Credit Line | Php 300K to Php 15M | Up to 12% |
| MayBank RSME Loan | Php 500K to Php 35M | *Prevailing Market Interest Rates |
| Metrobank SME Credit Line | Php 1M to Php 20M | *Prevailing Market Interest Rates |
| PsBank SME Business Credit Line | Php 2M with collateral; Php 500K with bank deposits | *Prevailing Market Interest Rates |
| Robinsons Bank, Go! Small Biz Loan | Php 500K to Php 20M | *Prevailing Market Interest Rates |
| Security Bank SME Business Loan | Php 1M to Php 5M | 1.30% to 1.75% |
| UnionBank MSME Dealers Financing Line | Up to Php 10M | *Prevailing Market Interest Rates |
| Zenith Capital Business Loan | SME Loan: Php 1M to 50M; Enterprise Loan: Up to Php 100M | Flexible Rates from 1.30% to 1.75% |
BDO SME Ready Check
The Banco de Oro, more commonly referred to as BDO, is one of the leading banks in the Philippines. They offer a business loan through their BDO SME Ready Check program, which provides a tailored funding option for your business type. It offers long-term business investment and a credit line for short-term operational expenses. With the SME Loan, you can receive waived fees up to Php 30,000.
Different business types can apply for this loan, from sole proprietorship and partnership to corporations. BDO requires that a business applies for a loan when they have shown profitability in operations for at least two consecutive years with a minimum annual gross sales of Php 1,000,000. As for collateral, BDO accepts houses and lots, commercial properties, vacant lots, condominiums, townhouses, and mixed-use properties. The SME Ready Check program requires that at least 5% of the availed amount is paid each quarter, where this amount will be added to the amount due every 3 months.
BPI Ka-Negosyo Credit Line
Known as the Bank of the Philippine Islands, BPI stands as one of the best banks in the country. Its program, called Ka-Negosyo Credit Line, is designed for entrepreneurs who want to get a kick-start for their businesses. The program requires that a business be registered, and the owner provides the bank with collateral documents. Entrepreneurs who are interested in applying for this loan should show a profitability of at least three (3) years for their business.
Draw funds can be accessed easily through the BPI mobile application, debit card, or checking account. One of its perks is that it offers a timely approval time that is relatively faster compared to other banks. This program requires a minimum loan amount of Php 1,000,000, which can be renewed annually. It has an interest rate of up to 12%, where several factors can either increase or decrease it.
MayBank RSME Loan
Despite being one of the new faces in the financial sector, MayBank has proven its security and stability in the industry. The MayBank RSME Loan opens opportunities for entrepreneurs who want to start a retail business. With this program, you can borrow any amount from Php 500,000 to Php 50,000,000. You can also choose between two streams that suit your business best. MayBank offers a Revolving Credit Line which is ideal for short-term working capital needs or liquidating receivables. You can also choose its Term Loan, which is optimal for long-term working capital requirements.
Loan interest rates differ depending on how much you intend to borrow and for how long you will be repaying the amount. At MayBank, they have prevailing market rates which will be applied to your loan once all evaluations have been completed. MayBank requires at least two (2) years of audited financial statements and income tax returns, and collaterals. If you intend to apply for a loan with MayBank, ensure that your business is already registered with the Department of Trade and Industry (DTI) or Securities and Exchanges Commission (SEC).
Metrobank SME Credit Line
Trusted by millions of Filipinos, Metrobank offers all sorts of banking services, from savings to business loans. One of their programs includes the Metrobank SME Credit Line, which helps entrepreneurs draw money to start their businesses. This tailored product is optimal for businesses that need to address quick-rising issues such as cash flow, liquidation, and short-term expense requirements. The Metrobank SME Credit Line is structured to fit any business size.
This product is designed to provide entrepreneurs access to short-term loans. You can loan different amounts whenever you need to address a business financial issue. Metrobank offers competitive interest rates to help you fulfill your financial needs and repay the borrowed amount. This product also comes with financial assistance, which can guide you as you conduct your business. The Metrobank SME Credit Line is renewable each year, so you can keep borrowing until you accomplish your business requirements. To apply for the Metrobank SME Credit Line, you must be a legally registered business. Metrobank also follows prevailing market interest rates which will depend on the size of your business and the amount you intend to borrow.
PsBank SME Business Credit Line
A subsidiary company of one of the country’s most-trusted banks, the Philippine Savings Bank offers a product called PsBank SME Business Credit Line. This product is made to provide small and medium business owners with the additional operating cash they require. It gives an avenue for entrepreneurs to easily and confidently expand their businesses. The PsBank SME Business Credit Line is an ideal solution for immediate financial demands, whether they’re working on raising capital, replenishing inventory, or growing square footage.
Gain immediate access to financial support and take advantage of one of the lowest market interest rates. PsBank requires a minimum of Php 2,000,000 if collaterals are real estate properties and Php 500,000 if collaterals are against deposits. This loan is renewable annually and is billed on the 10th of each month, equivalent to the minimum amount due. For collateral, you can choose between residential, commercial, or industrial properties and cash deposits.
PsBank provides quick access to the fund once the application is approved and offers flexible borrowing options for short-term periods or when you intend to repay the loan amount quickly. Borrowing from PsBank would require you to have your business registered with DTI or SEC. The bank also requires that you have shown profitability for at least two (2) years.
Robinsons Bank, Go! Small Biz Loan
Robinsons Bank offers a flexible and convenient loan program for small businesses. Their product, Robinsons Bank Go! Small Biz Loan features a minimum loanable amount of Php 500,000 and a maximum amount of Php 20,000,00. It has a line facility of one (1) year credit line and a minimum term loan of one (1) year up to a maximum of ten (10) years. For employed individuals, the borrower must have been employed for at least one (1) year with a current and continuing employment of at least three (3) years. For businesses of sole proprietorship, partnership, and corporation, they are required to have shown profitability for at least three (3) years.
Security Bank SME Business Loan
At Security Bank, you can take out a loan of up to Php 5,000,000 without giving any collateral. Featuring the Security Bank Business Express Loan, you can enjoy a hassle-free application process with minimal requirements and zero application fees. The bank offers fast approval and flexible loan rates. For terms, when you set a term of twelve (12) months, you receive a 1.30% interest rate. For loans with a term of eighteen (18) months, you’ll receive an interest rate of 1.40%. For twenty-four months, your interest rate would have a slightly higher increment which will give you a 1.70% interest rate, and when loaning with a term of thirty-six (36) months, your interest rate will be at 1.75%.
The Security Bank Business Express Loan is perfect for businesses seeking short-term financial assistance. The product is equipped to provide support for day-to-day operations while requesting only minimum requirements and interest rates. Applying for this loan requires a processing fee of Php 3,000, a notarial fee of Php 400 for sole proprietorships, and Php 800 for partnerships and corporations.
UnionBank MSME Dealers Financing Line
UnionBank offers various products and services for individuals and businesses. One of their products is the UnionBank MSME Dealers Financing Line, which is a revolving credit line. You can loan up to Php 10,000,000 with a standby credit line, along with flexible payment options and no collateral required. This product is relatively one of the easiest to apply for. The basic requirements to apply for this loan include a two (2) year audited financial statement (for loans Php 3M and above), one (1) year of income tax returns (for loans Php 3M and above), and the applicant’s past financial statements.
Zenith Capital Business Loan
This non-collateral business loan offers a quick and seamless experience. The Zenith Capital Business Loan was designed to fund the ambitions of Filipino entrepreneurs and alleviate financial challenges. With over five thousand clients and more than eight billion worth of loans released, Zenith Capital has established trust among its users and in the financial industry. Zenith Capital offers an SME loan which provides a loanable amount of Php 1,000,000 to Php 50,000,000. It also provides enterprise loans where entrepreneurs can borrow up to a maximum of Php 100,000,000. Zenith Capital has a business loan interest rate of 1.30% to 1.75% monthly and a one-time 5% processing fee.
In the Philippines, there are numerous finance businesses that operate both in the public and private sectors, making the process of finding a suitable business loan time-consuming. Sometimes, it becomes confusing once you’ve compared one bank over the other. With this, you must pay good attention to the details that will give your business the best financial solutions it needs.
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