Introduction
Obtaining funds is necessary whether you’re starting or expanding a business. At the beginning of your entrepreneurial journey, you will need capital to buy supplies and equipment, rent or buy a physical store, or maybe even hire employees. Likewise, when the time comes to grow your business, you will need money to expand your product line, open a new branch, or employ more workers.
While there are various ways to get funding, applying for an online SME business loan in the Philippines is one of the most viable. The process is convenient and safe, provided you choose a trusted lender, like Cebuana Lhuillier Kanegosyo Center. In this blog, we’ll delve into the essentials of online business loans, such as their benefits, application process, and tips for securing approval.
Benefits of Applying for Business Loans Online
Applying for a business loan online, instead of in-person, offers several advantages, such as:
Faster Transactions
Applying online means you won’t have to line up to have your papers reviewed and processed. Approval is also much faster because everything is done electronically. It is possible to receive the money you borrowed on the same day as your application.
Convenience of Application
Online applications make it convenient for borrowers because they don’t have to travel to submit their requirements to lenders. They can process their application from the comfort of their home and at any time of the day. This is perfect for those who don’t have time to visit a bank during regular hours.
No Collateral Needed
A collateral is an asset, such as jewelry, vehicles, or real estate, that the borrower pledges to a lender to have their loan approved. It provides assurance to the lender that the borrower will repay the loan. The good news is that online loans do not require collateral, making them a viable source of funds for many budding business owners.
Online Business Loan Application: The Process
The process of applying for an SME business loan online in the Philippines may vary depending on the lender. However, generally, you can follow the steps below:
Choose a Lender and Do Your Research
First, make sure to pick a trusted lender. One way to do this is by checking if they are regulated by government agencies, such as the Bangko Sentral ng Pilipinas. Research their reputation and check online reviews. Also, do not be tempted to select lenders who offer questionably low interest rates and too-good-to-be-true promises.
Understand the Terms and Conditions
Before tying yourself to a loan agreement, see to it that you fully understand the terms and conditions of the loan. Know how much the loan costs, including interest rates and fees. Inquire about penalties for late payments, too.
Prepare the Necessary Documents
Once you’ve chosen a lender and the type of loan you want to apply for, it’s time to prepare the necessary documents. This may vary across different lenders, but typically, you will be asked to submit the following requirements:
- Valid IDs
- Business Permits
- Personal and Business Bank Statements
- Income Tax Return (ITR)
- Proof of Business Profitability (e.g., customer and supplier list, receipts, etc.)
Submit Them to the Lender and Wait
Before you submit your documents, make sure to double-check them to prevent any delays to your application. More importantly, because you are applying for a loan online, see to it that the lender’s website is secure. Remember, you will be submitting various financial information, so it’s important that it remains confidential.
How To Find the Right Lender
How do you find the right lender when applying for an SME loan in the Philippines? Follow these tips:
Consider Your Needs
Begin by knowing how much money you need and what you’ll use the loan for. For instance, you may need the loan to purchase more equipment, fund a marketing promotion, or hire new employees. Also, not all lenders are equal. They specialize in various types of businesses and have different requirements. In other words, there may be some lenders you won’t be qualified for.
Review Application Process
Consider the efficiency of the application process of the lender. If it is unreasonably lengthy and complex, it may take some time before you obtain the funds you need. For this reason, try researching lenders with a quick and transparent online application process. You can also ask other entrepreneurs for their recommendations.
Listen to Your Business Coach
Getting business coaching is an excellent way to expand your business knowledge and increase your chances of succeeding. Many business coaches were entrepreneurs themselves, so they have considerable experience in various aspects of starting and growing a business. This includes getting funding from loans. As such, it will benefit you if you heed their advice.
Some Tips for a Successful Loan Application
Preparation is key to getting loans approved, be it personal loans or SME working capital loans in the Philippines. To improve your chances of success, check out these tips from Cebuana Lhuillier Kanegosyo Center:
Check Your Credit Profile
The borrower’s ability to pay the loan on time is one of the primary factors lenders want to know. One way they determine this is by looking into the borrower’s credit history. If your track record is good, your application will have a higher chance of getting approved, even with lower interest rates. You can get a copy of your credit report from CIBIApp, an app launched by CIBI Information, Inc., one of the accredited credit bureaus of the CIC.
Organize Your Financial Statements
Businesses with a healthy cash flow have a better chance of getting their application approved. As such, you must present a stable financial record. To do this, be sure to keep track of and organize all your financial statements. If you struggle with this task, consider outsourcing it or using accounting software programs.
Create a Detailed Business Plan
A detailed and well-structured business plan helps lenders understand the essentials of your business. More importantly, it’s a means to showcase your potential as a business owner, reassuring lenders that you have the financial capacity to repay your loan.
Be Mindful of Your Character
Try your best to have a good impression on your lender. Show yourself to be a competent and committed entrepreneur. Granted, your credit profile and other factors have more weight in successfully applying for a loan, but establishing a good relationship with your lender can increase your chances of getting approved.
Get Assistance From Business Loan Experts!
It’s understandable if applying for a business loan online intimidates you. After all, it can be hard to familiarize yourself with various SME financing services in the Philippines. Now you don’t have to because of Cebuana Lhuillier Kanegosyo Center!
As part of our desire to make doing business easier for Filipinos, we offer Kanegosyo Coach, a resource center tackling various topics about starting, running, and expanding a business. Here, you’ll find multiple resources that’ll provide answers to many questions business owners ask, including those about loans.
This way, you can easily find all the answers you need in one place. To access this service, simply sign up today to become a Cebuana Lhuillier Kanegosyo Center member!
FAQs About Online Business Loans for SMEs
What Are the Possible Disadvantages of Applying for a Business Loan Online?
First, registering online for an SME loan in the Philippines may be difficult for older business owners with limited technology knowledge. Secondly, online loan applications can put you at risk of online lending scams, especially if you do not partner with reputable lenders. Lastly, because online loans are a type of unsecured loan, the interest rate may be higher than other loan types.
What Are the Usual Loan Requirements Asked by Banks or Lenders?
To be eligible to apply for a loan, you need to have your business registered, so you should obtain permits and other documents to prove you are operating legally. Lenders will also want to check the financial health of your business to help them evaluate your capability to repay the loan.
How Much Can I Get When Applying for a Business Loan in the Philippines?
The amount of money you can borrow will vary among lenders. The good news is that with Cebuana Lhuillier Kanegosyo Center, entrepreneurs may borrow as much as ₱50,000. To start your loan application, sign up to become a Cebuana Lhuillier Kanegosyo Center member! Membership is free with no expiry.
Conclusion
Online SME business loans in the Philippines enable entrepreneurs to quickly secure funds for starting or expanding a business. The convenience of online business loans empowers them to address various financial concerns so they can succeed no matter what stage they are in their entrepreneurial journey.
Cebuana Lhuillier Kanegosyo Center is a one-stop-shop business platform offering various services and products, such as business loans, to help Filipino entrepreneurs succeed in their dreams.
Rest assured that our online application process is safe and easy to understand. If you have any questions or concerns, please don’t hesitate to contact us. You may also reach out to our staff or access our broad list of online resources.