Guide to Business Loans for Start Ups in the Philippines

Many people wish to start a business so they could try to earn more for their family, but they can’t do so due to lack of funds. After all, you need money to start a business. The good news is that it is easy to get personal loans from various banks and financial institutions that you can use as capital for a small business.

Whether you are planning to start a homebased business or a franchise or something that needs a rented/leased spot inside a mall, having enough capital will help jumpstart your business. You don’t even have to start big. You can slowly grow your company from scratch.

A lot of financial advisers would tell you to never use your emergency funds to start a business. You should always keep that as backup.

financial adviser

But you can use personal loans as leverage, instead. That is possible but you have to make sure that the money your will later be earning for your business will be more than enough to cover the monthly amortization. Moreover, the expected profits should be better or higher than the interest you have to pay for the loan.

Here’s a guide to business loans for start ups in the Philippines.

Bank Loans

Banks are stable financial institutions that offer various business loans, personal loans, and other types of loans for their depositors. Depending on your credit score, you can borrow anywhere from a few thousand pesos to millions!

You can always opt for a smaller amount, such as Php 1 million or lower, depending on what type of business you wish to open. There are even banks that allow you to borrow as high as Php10 million for a small business loan. This is for a maximum of 10 years to pay.

But loans like this would often require a collateral. Also, you have to have an excellent credit score to even be considered for a loan. The bank wants to make sure that you can actually pay up; thus, you should be regularly employed or should have a business/job that meets the bank’s minimum financial requirements.

bank loan

Government Loans

Did you know that the government actually has loan programs for those who wish to start a business? There are options for MSMEs (micro, small, and medium enterprises) to get loans from relevant government agencies. Such includes loans facilitated by the Department of Trade and Industry (DTI).

Overseas Filipino workers are also given a chance to open a business with loans from the Overseas Workers Welfare Administration (OWWA) as part of the reintegration program.


There are already a lot of cooperatives that offer options for member-owners to get personal loans, business loans, and a host of other loans they can use for various purposes.

What is great about cooperatives is that the interest rates are usually lower. Member-owners also receive a dividend and patronage refund at the end of each financial year.

In general, cooperatives have lower interest rates than banks, but you can still borrow a huge sum of money. However, take note that they only lend to the member-owner. Moreover, the amount you can borrow is usually dependent on how much money you had put in as share capital or capital contribution.

Also, cooperatives often require borrowers to ask at least one person (who should also be a member-owner) to be a co-maker. This can be tricky because both you and that person need to sign a notarized contract which states that if ever the borrower won’t be able to pay up the loan, the co-maker has to pay the balance.

It could be difficult to find a co-maker who would be willing to sign such a scary legal document. Many wouldn’t wish to be in that position, especially if they are not sure whether you are a good payer and could actually afford to pay off the loan.

Lending Agencies or Microlenders

Although with higher interest rates often associated with the “5-6”, lending agencies are often popular with many borrowers due to the ease of obtaining a loan even without a good credit score. If you are in need of money to, these microlenders could still be an option for those who wish to start a business.

Microlenders often lend money even to those without a regular job or could not provide ITRs (income tax returns) or don’t have a business. While you might not be able to borrow millions of pesos from microlenders, you can already get loans that could help you open a small business.

For starting a business that doesn’t require a big capital, you can opt to apply for a personal loan or a multi-purpose loan. It is easy to find personal loans Philippines, if you know where to look.

Though you can easily search for personal loans in your locality, the good news is that you can also do so while at home. In fact, you can even find lots of options on the internet! You can even compare personal loans online.

Using online options, you can already have an idea of your credit score and whether you’ll qualify for a loan. Also, a lot of sites already offer tools that help you estimate how much money you can borrow, how long the payment terms will be, and how much will you have to pay in monthly amortizations.

Truly. it would be easier, faster, and actually safer for you to find personal loans to start your new business or even grow your start up, thanks to platforms like Go Bear where comparisons are made easy.

BN Philippines
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