LIST: These Banks Offer Business Loans for MSMEs
Need financial aid in starting your business? Here is a list of banks in the Philippines that offer loans, specifically for Micro, Small, and Medium Enterprises (MSMEs).
According to an OCTA survey conducted in October 2022, a staggering 81% of adult Filipinos would rather go into business—should they have enough know-how to do so. However, not having enough capital is a setback that can prevent people from starting new businesses.
Luckily, there are different ways to fund a business venture—one of which includes applying for a business loan. Different banks offer different types of business loans depending on the purpose and nature of the business, but there are some banks that cater specifically to micro, small, and medium enterprises (MSMEs).
If you’re planning on starting a business and need a loan, we’ve put together a handy guide on business loans that different banks are offering for MSMEs and how you can apply for one.
Banco de Oro (BDO)
BDO’s Term Loan aims to provide funding for long-term business investments—like buying new assets and real estate. What’s more, one of the key features of this business loan is that payments are spread out into equal monthly amortization so that you will have a fixed loan term.
The minimum amount that can be loaned is PHP 1,000,000, while the maximum amount that can be loaned is PHP 20,000,000.
- Must be at least 21 years old, but not exceeding 70 years old at the end of the loan term
- For sole proprietorship, partnerships, and corporations:
- Business must be operational and profitable for at least two consecutive years
- Minimum annual gross sales of PHP 1,000,000
- Business is located within BDO’s serviceable area
For documentary requirements and other details, please visit the BDO website.
Bank of the Philippine Islands (BPI)
BPI’s SME Term Loan is recommended for entrepreneurs who are looking to fund their working capital, purchase inventory or equipment, expand plans, and more. The minimum loan amount is PHP 300,000, and what’s more, the loan requires collateral, such as a real estate mortgage or deposit.
- Filipino citizen
- At least two years in the present or immediately preceding residence
- At least 21 years old, but not more than 70 years old at the time of loan maturity
- At least three years of business operations
For documentary requirements and other details, please visit the BPI website.
Robinsons Bank offers a business loan called Go! Small Biz. Individuals can use this loan either to buy a franchise or as capital for a new business, while existing businesses may use it to fund projects or acquire assets.
The loanable amount is, at minimum, PHP 500,000 and PHP 20,000,000 maximum. The minimum term loan is one year, while the maximum term loan is 10 years.
- Individuals: Must be a permanent or regular employee of a particular employer for at least one year, and the continuity of employment is at three years minimum
- Sole Proprietorships, Partnerships, and Corporations: Must be in operation for a minimum of three years, and the most recent three years should be profitable
For documentary requirements, collateral requirements, and other details, please visit the Robinsons Bank website.
MSMEs can opt for Security Bank’s Business Express Loan, which is ideal for financing a business’s short-term needs. The minimum loan amount is PHP 500,000 and the maximum amount is PHP 5,000,000.
Loan Terms with Corresponding Loan Rates
- 12 months (loan rate of 1.30%)
- 18 months (loan rate of 1.40%)
- 24 months (loan rate of 1.70%)
- 36 months (loan rate of 1.75%)
Eligibility Requirements for Businesses Where the Loan will be Applied For
- Duly registered to operate as a business in the country
- Must be operating for at least three years and profitable for the latest one year
- Must not have outstanding debt that exceeds 40% of the company’s monthly income
- Must be tied to the primary owner of the business
Eligibility Requirements for Identified Business Owners
- Must have an existing account with Security Bank (at least 6 months old with PHP 50,000 ADB) OR existing credit card (any bank—credit card number/s must be provided in the application)
- Permanent residency in the country
- Must be at least 21 years of age at the time of application and not more than 65 years of age upon maturity of the loan
For documentary requirements, collateral requirements, and other details, please visit the Security Bank website.
UnionBank’s business loan for MSMEs allows entrepreneurs to loan a minimum of PHP 50,000 and a maximum of PHP 1,000,000 with an interest rate of 3% per month. However, no collateral is needed, should you wish to apply for this loan.
- 3 months
- 6 months
- 12 months
- 36 months
- Must be at least 18 years of age
- Must be a Filipino citizen
For documentary requirements and other details, please visit the UnionBank website.
What to Keep in Mind When Applying for Loans
There are a number of options that aspiring entrepreneurs can choose from when looking for a bank to loan from. While selecting the best option can be tricky, it is important to always read and understand the terms and conditions of any loan you’re interested in. And should there be anything that you need to clarify, do not hesitate to approach your chosen bank or a trusted individual with experience in loans.
It is also important to remain practical by choosing a loan that is well within your means. Given that some loans require collateral, there’s a risk in choosing a loan that you might not be able to pay for eventually. Take the time to study your financial capabilities and do proper research, so as to avoid any complications, headaches, and regrets in the future.