Are you an aspiring entrepreneur who wants to start your own business? If you’re like most people, you could probably use some extra cash to bankroll your plans. A business loan application is a practical option you should look into. Fortunately, most of the commercial banks offer different kinds of business loans to suit your needs.
A business loan not only allows you to have the capital you need for a new venture, it also helps existing business owners to expand and grow their operations. They can get the equipment they need or upgrade the ones that they already have. The money can also help tide them over while still waiting for their clients to settle their obligations.
Are you eligible?
The requirements will depend from bank to bank, but generally you must meet the following:
- You should be between 21 to 70 years old by the time the loan reaches its maturity
- You must be a Filipino citizen, by birth or legalization
- You must be employed, with at least one year of tenure. There are banks that require you to earn at least PHP 10,000 a month
- You have to be a sole proprietor, a self-employed individual, or a part of a corporation
If you are eligible to apply for a business loan, you need to go through the following steps to make sure that you get approved and secure the right type of loan.
- Establish your reason for borrowing money
Why do you need the loan? You must nail down exactly what you need the money for. Do you need a working capital? Do you need to buy real estate or equipment? Are you planning to expand your current business? Are you planning to buy a franchise? There’s a specific type of loan that will complement your needs.
- Decide how much money you need to borrow
It’s never a good idea to borrow more or less than what you need. If you borrow an excessive amount, the bank may doubt your credibility as an entrepreneur. If you borrow less, you will face problems in the future, since you didn’t have enough cash to cover all your expenses, which will lead to your inability to pay what you owe.
- Shop around for the best loan
Doing your research is as simple as looking up banks online and see what they offer, but it’s best to speak to a loan officer after you decide which bank to go for. He or she can help you decide whether you need a long-term loan, a short-term loan, or a line of credit.
- Complete your requirements
Documents can make or break your eligibility. The most common requirements for business loans include the latest income tax returns, latest bank statements, and valid IDs. If you’re an employee, you need to provide a certificate of employment and latest payslips. If you’re a business owner, you will be asked for your business permit, registration certificates, latest financial statement, and articles of partnership.
Getting your loan approved by banks and lenders shouldn’t be difficult with the help of your loan officer. After submitting your requirements, you have to wait around 3 to 7 business days to know if your loan is approved or not.