Digido loan for your businesses and start-ups!

In this article you will find out all the most important information about a business loan. Who is eligible for a business loan, what requirements you need to meet, and how much you can get. Digido doesn’t offer business loans, but you can still borrow money and spend it for any purpose, such as growing your business.

Key takeaways:

  • Business loans are important for the economy so that entrepreneurs who have great ideas can start businesses.
  • You can get a business loan from a bank or through a government program.
  • We have listed the basic requirements for a borrower.
  • Digido does not offer business loans, but you can still borrow money and spend it for any purpose, such as growing your business.

Small Business Loan in the Philippines

A business loan is money that you borrow from an institution for commercial purposes. (1) In many cases, business owners borrow to add funds for their newly established business or deals that they are about to put up.

There are many types of small start-up loans, not all of them come in the form of direct financing. In the Philippines, the most common source of the loans is banks. However, this is not the only source of loan. There are many others, which we will discuss today. These loans, like other  types, have an interest. The interest rate varies between banks and the amount of your loan.

I want to borrow ₱ 10000
Min: ₱ 1000
Max: ₱ 20000
Payment Terms 10 days
7 days
21 days
My Monthly Gross Income ₱ 20000
1000
200000
You return*: 10 000
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We recommend taking a loan!

* Interest payments are approximate. The final loan amount and interest rate must be confirmed in your loan agreement after loan approval.

Today, you will learn about the different types of cash loans for the business, where to get them, and how much interest you can expect. By the end of this tutorial for startup loans in the Philippines, you will be able to make an informed decision about borrowing money for your deal. 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 working capital and where to get it.  

Can I Take a Business Loan at Digido?

Digido is an online fast lending company that offers quick cash for your business needs to those who need it. Right now, it does not offer online startup 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 Digido 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 money to pay for goods, materials, utilities, and so much more.

To be able to get a online loan for working capital from Digido, 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. 

All operations are performed online - you don't have to leave your house
In only 4 minutes you can receive up to 5000 pesos in your bank account
We don't require guarantors representation, documentation, or guarantee deposits.
The service is fully automated

Types of Business Loans 

There are different types of cash loans for the business, and you have to choose the best one that will help you grow your company.

Term Loans

A term loan is that you pay over the long term. Usually, this is the 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 requirement is at least ₱100,000. Term loans also have high interest rates.  

Credit Line

A credit line is a loan where you receive a credit card. You can use this credit card for buying materials for your company. 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  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, the bank will seize your asset if you fail to pay your working capital small loan

Unsecured Business Loans

This is a quick 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 credits are small, not more than a million pesos or so. Unsecured credits 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 money to get a startup in the Philippines. These are banks and government business credit.

Banks – you need to be employed or your business should already be established. In some cases, banks will approve your credit 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 loans – you can get the loan in the Philippines from the government. One government department where you can borrow money is the Department of Trade and Industry or DTI. (2) Such loans are regulated by the Bangko Sentral ng Pilipinas.

Annually, DTI sets aside a budget of ₱1 billion or more for loans. These 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 startup must have already existed for at least one year by the time of your application.

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Why do You need a your Business Loan?

What are the reasons for getting a online loan in the Philippines?  Why not just save money and then start your company once you have the capital?

The main purpose of getting a money is time. It is better to start a your business loan now when the prices of goods are still low. Here are the other reasons why entrepreneurs need a small  capital loan in the Philippines:

  1. To expand the business – if your company 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 business credit so they can establish a new branch. It is in this case small commercial capital loan will help you. If this happens, they can earn more money, and then pay their loans faster. 
  2. To improve cash flow – some companyes 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.
  3. To invest in better marketing strategies – some firms 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. 
  4. To prepare your start-up 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 fast cash loans for small business for this purpose, and then pay it off when you make a profit.
  5. To finance daily commercial 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.

FAQ

  • Can I get loan to start business?
    Yes, it is possible, but most often with collateral or a guarantor. If you are just starting a business, getting a no-collateral loan in the first year of your company is very difficult. Lenders need a guarantee that the loan will be paid back.
  • How can I get business loan in BDO?
    Yes it is possible if you meet the terms of the loan.
  • Is a business loan a good idea?
    It's a good option to get more opportunities for your business and expand your reach.

Startup business loan in the Philippines

The main problem with starting or growing a deals is finding financing for it. Whether you want to start your business from scratch or expand it to greater heights, getting financing can be the next best step for you and your business.

That is why loans for startup Philippines offered by banks and lending companies are popular among Filipino businessmen. It is a credit of money, usually secured by valuable property, with mandatory interest payments. In order to apply for a  startup loan, you must have a working business plan of a profitable and interesting investment project with a specific payback period. You can get a loan if you prove your solvency and the profitability of the chosen direction.

Let’s list a few companies that can provide such a lenders. The conditions need to be found out in each of them, the requirements may vary. For example, M Lhuillier  loan requirements will be less demanding than for AUB credit, because the bank treats customers more demanding. Check also First circle and Zenith capital credit  loan. But more often than not, the company will require a detailed business plan and collateral in the form of real estate or valuable property.

If you are looking for a start up business loan without collateral Philippines, Digido can help. Unfortunately the amount is not very big, maximum 25000 pesos, but you only need 1 valid ID and that is it, no business plan or collateral.

Apply now

 Business Loan Requirements 

Here are the general requirements for filing a  loan for both banks and government credits for small businesses in the Philippines.

  1. DTI registration – document showing that your deal is approved by either DTI or the Securities and Exchange Commission.
  2. Bureau of Internal Revenue registration – you will be able to get this once you have a Mayor’s Permit.(3)
  3. Mayor’s permit – secure this from your municipality Office of the Mayor. 
  4. Income Tax Return (ITR) – this is not required if your business is not operating yet.
  5. Proof of identity – government valid IDs.
  6. Proof of income – show your ITR or proof of cash; you can also show proof of employment and pay slips.
  7. Proof of address and citizenship

If you are applying for a money 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.

Apply now

Comparison of Business loans from top Philippine banks

 

Bank Amount and Terms Requirements Documents
Security bank PHP 1,000,000 to 5,000,000 for up to 3 years – Duly registered to operate as a business in the Philippines;
– Must have been operating for at least 3 years, and profitable for the latest 1 year.
– Must have no outstanding debt that exceeds 40% the company’s monthly incomeOwner be required to have:
– An existing account with Security Bank OR Existing credit card (any bank; credit card number/s must be provided in application)
– Permanent residency in the Philippines;
– At least 21 years of age at the time of application and not more than 65 years of age upon maturity of the loan
– Signed and Completed Application Form
– Copy of 2 valid IDs with photo from primary applicant / owner / authorized signatory
– Latest ITR with BIR stamp
– Latest (1) year Audited Financial Statements
– Valid DTI Registration docs
– Latest 3 months bank statement
– List of customers/suppliers and details about their dealings
– Valid Business or Mayor’s Permit
Robinsons bank PHP 500,000 to 20,000,000 for up to 10 years – Sole Proprietorship, Partnership, Corporation

– Operating for more than 3 years and latest 3 years should be profitable

– Completed SBL Application Form
– Business Papers ( DTI/SEC Registration, Mayor’s Permit, Articles of Partnership/Incorporation, By-Laws, General Information Sheet)
– Last three (3) years of Income Tax Return (ITR) and Audited Financial Statement (AFS)
– Last six (6) months bank statement or copy of passbook
– Photocopy of two (2) valid IDs with specimen signature
– Latest proof of billing (utility bill, credit card bill, etc.)
– List of at least three (3) major supplier and customer
– Collateral Documents (Copy of TCT/CCT, Tax declaration and location plan/vicinity map)
Maybank PHP 500,000 to 30,000,000 for up to 10 years – Sole Proprietorship, Partnership, Corporation

 

– Company Profile (kindly include product line)

– Business Papers: Articles of Incorporation with By-Laws, Latest GIS, DTI/SEC Registration, Business Permit

– Three (3) years ITR and Audited Financial Statements

– List of Customers and Suppliers with contact details

– One year projections

– Project details

– Photocopy of TCT/CCT with Tax Declaration and RETR (if applicable)

– Location Plan (if applicable)

BDO PHP 3,000,000 to 20,000,000 for up to 10 years – Sole Proprietorship, Partnership, Corporation

– Business is in profitable operation for at least 2 consecutive years

– Minimum annual gross sales of 1 Million

– Business is within a BDO serviceable area

– Accomplished and signed application form
– Copy of 1 valid ID
– Photocopy of Audited Financial Statements for the last 2 years with latest ITR
– Bank Statements or Photocopy of Passbook for the last 6 months
– Certificate of Business Registration with DTI
– Business Background / Company Profile
– Articles of Partnership AND Certificate of Registration issued by SEC
CTBC bank PHP 500,000 to 50,000,000 for up to 10 years Proprietorships, partnerships and corporations who:

– are Filipino-owned
– have been in business operations for at least three years

– Duly filled-out and signed application form
– Payment of appraisal fee
– Photocopy of two (2) valid IDs of each authorized signatory
– Business registration papers issued by the Department of Trade and Industry (for sole proprietors)
– SEC Registration Certificate, Articles of Incorporation, By-Laws and latest General Information Sheet (GIS) (for corporations)
– Latest six (6) months bank statement
– Audited Financial Statements for the last three (3) years
– Income Tax Return for the last three (3) years
– Photocopy of TCT / CCT
– Photocopy of lot plan / vicinity plan / subdivision plan
– Photocopy of Tax Declaration
Metrobank PHP 1,000,000 to 20,000,000 for up to 7 years – Duly Accomplished Business Loan Application Form

– One government ID

– Business Registration Certificate or Permit

– Proof of Billing

– Income Tax Return (ITR) for the last three (3) years
– Audited Financial Statement for the last three years
– Bank Statements for the last six months
– Owner’s Duplicate Copy of Transfer Certificate of Title
– Certificate of Placement
– Tax Declaration
– Vicinity Map, Lot plan and Bill of Materials for construction.

Articles Sources

  1. Business loan https://en.wikipedia.org/…
  2. Department of Trade and Industry Philippines https://www.dti.gov.ph/ 
  3. Bureau of Internal Revenue registration https://www.bir.gov.ph/index.php/…

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Written by: Sean Martin D. Plantado

Author pages:
Sean Martin Plantado is the head of Customer Care Dept. and Online Sales Dept. of Digido Finance Corp. creating articles, blogs, and other learning mediums that helps Filipinos struggling on their financial literacy. Sean also loves Cycling, Photography, Cinematography, Online gaming, Fine Arts, and dreams of becoming a Doctor of Veterinary Medicine.

Reviewed by: Rafael Hular

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Rafael “Raffy” L. Hular is, the Finance and Accounting Manager. of Digido Finance Corp., monitoring and controlling the flow of cash that comes in and out of the company to meet the company’s business needs, preparing the financial reports and analysis of income and expenses, and monitoring tax compliance.  Raffy loves reading Japanese comics called manga and watching Japanese animated cartoon series. He dreams of establishing his own Accounting and Auditing Firm and teaching in a University.