Starting a new business isn’t easy. There is a wide array of costs to cover, including researching market trends, testing new products, and securing your inventory.
Fortunately, up-and-coming entrepreneurs have various small business funding options to choose from if you know where to look. But securing this funding may be hard when you’re in the early stages of starting a business.
The application process can be tricky, and not every grant works for every business. Read this article to discover everything you need to know about the different funding options for small businesses and how to apply for funding.
How to Apply For Funding For Small Businesses in the Philippines
Micro, Small, and Medium Enterprises (MSMEs) are vital to the growth and development of the economy. Thus, several government programs in the Philippines are made especially for MSMEs. Here are five aspects you need to consider when applying for funding:
Step 1: Determine Your Reason For Needing Business Funding
When you're applying for business funding, you need to do it for the right reasons. Appropriate use of funding includes purchasing equipment or real estate, business expansion, increase of working capital, and financing a franchise.
Step 2: Determine How Much Money Your Business Needs
Before applying for business funding, it's essential to estimate the amount you need for your business based on your reason for getting business funding.
If you ask for too much money, your loan provider may doubt your credibility as a business owner. If you ask for too little, you'll deal with problems like lack of funds to purchase critical equipment for your operations or lack of working capital.
Step 3: Check If You’re Eligible For Business Funding
Here are some general requirements that may apply to all funding you come across:
- Filipino citizens between 21 and 65.
- A good credit standing.
- Business owners with two years of profitable operations at least.
- Non-entrepreneurs, whether employees or professionals, with at least two years of steady income.
- A good credit standing.
- Business is registered with SEC or DTI with a minimum of 2 years of profitable revenue.
- A minimum annual gross sales, depending on the bank.
Step 4: Find The Best Business Funding To Suit Your Business Needs
There is a variety of short-term and long-term funding for MSMEs and franchising businesses. Don’t pick just any.
Research which loan provider can meet your business funding needs and then review the features of that loan.
Step 5: Submit The Required Documentation
Gather all the required documents and submit original copies and photocopies. Here’s what you will be required to submit:
- A signed and completed loan application.
- A valid ID.
- Your latest bank statements.
- Your latest income tax returns (ITRs).
Business Documents for First-time Entrepreneurs
- Your resume.
- A certificate of employment.
- Your latest pay slips.
Business Documents for Business Owners
- Your company profile or business background.
- Your latest audited bank statements.
- Board resolution, if you own a corporation.
- A business permit or SEC/DTI registration certificate.
- Articles of Incorporation or Articles of Partnership.
- List of major customers and suppliers with details about dealings.
Once you’ve finished the final step, it will take about 3-7 days for your application to be processed.