Where to Find Capital When Starting a Business: Proven Funding Options for Success in 2025

 

FINDING CAPITAL FOR YOUR BUSINESS

Starting a venture requires funding to cover operational costs, expand, or manage financial gaps. When payments from clients are delayed or sales slow down, securing additional financing can keep operations running smoothly. One of the quickest ways to grow a company is by obtaining financial support.

In the Philippines, various funding options are available. The right choice depends on your needs, financial standing, and urgency. This guide explores different ways to secure capital when starting an enterprise.

Reading Time: 8 to 10 minutes Best for: Entrepreneurs aged 20 to 30

 

Government Assistance for Businesses

The Philippine government provides financial aid to businesses, especially those affected by economic downturns. Under local regulations, banks and lending institutions must offer flexible repayment options, ensuring easier financial management during tough times. This rule applies to various credit arrangements, including company, personal, and auto loans.

 

The government can help businesses operating in restricted zones with problems repaying debts. All banks, quasi-banks, financing organizations, and companies, both public and private, are required by Philippine law to assist local businesses affected by quarantines with loan repayment. Additionally, they must be provided a 30-day grace period before beginning any loan payments. All loans, including credit card loans, fall under this umbrella. Loans for personal, home, car, and wage are also covered. Furthermore, the debtor won’t have any consequences regarding interest, fees, or payments.

 

 

1. Bank Loans: A Traditional Funding Option

Bank loans are a popular funding choice for businesses looking for structured financing. Banks and financial institutions provide loans to help businesses launch, expand, or manage debt.

How Do Business Loans Work?

Lenders provide capital, which is repaid with interest based on an agreed schedule. Business loans often have higher loanable amounts but come with strict documentation requirements and eligibility criteria.

Eligibility for a Business Loan:

• Filipino citizen, under 65 years old at loan maturity
• Business registered with the SEC or DTI, operating for at least three years
• Meets minimum annual gross sales requirement
• Good credit history

Basic Requirements:

• Valid government-issued ID (e.g., TIN ID, Passport, Driver’s License)
• Business Permit, Lease Contract, or Utility Bills as proof of business address
• DTI or SEC Certificate of Registration
• BIR Certificate of Registration
• Audited Financial Statements
• Completed loan application form

Bank loans are ideal for established businesses with a strong financial history. However, they require time for approval due to thorough background checks.

 

2. Private Lending Companies: A Fast-Track Option

In the Philippines, private lenders are typically corporations with investors offering loans for personal and business purposes. Private lending firms are frequently contacted by people and business owners who are typically ineligible for bank loans. Private lenders usually have a less complicated application process than banks do. They draw more borrowers because they provide simple procedures, quick response times, and convenient access to funds.

 

You might choose this financing if you’re starting or have a small business because some funding companies merely require borrowers to produce evidence of identification, proof of billing, and proof of income.

 

Some private businesses may also be able to approve loans in less than 24 hours, depending on the loan type and the lender. This is much faster than accepting conventional bank loans, which require time for data collection, document verification, character or background checks, and even financial statements. Depending on the loan size, some private lenders will release the money the same day the application and approval are received.

However, private lenders frequently provide loans with higher interest rates, increasing the cost of the loan overall, particularly if you require the money for a longer time.

 

These businesses have a higher cost of raising money to lend since they might receive funding from profit-seeking investors. However, they can also make loans to businesses or individuals with a higher risk of default easier and quicker. Private lenders frequently request a co-guarantor as well. Another individual, a co-guarantor, will be responsible for your loan if you cannot complete your payments on time. They may also demand collateral; if you fail to pay, they may seize control of your priceless possessions. Higher interest rates are how private lenders make up for the increased credit risk.

 

Private lenders can not be as accommodating when it comes to repayment, and you’ll usually have between two and eighteen months to pay back your loan. Twenty-four months would be the longest (depending on the financing company). This loan should be utilized for urgent cash needs that will dramatically increase your short-term working capital cash flows, according to higher interest rates and short payback durations.

 

Whatever country you obtained your business funding from, the fact is that it comes with repayment responsibilities that could endanger your assets. You must use critical thinking to get the most out of the additional funds you will borrow.

 

 

Government Loan

Small and medium-sized businesses substantially influence the economy of the Philippines. By fostering growth in rural regions and producing jobs, they achieve this. The COVID-19 pandemic, however, significantly harmed these companies. In reality, a month after the lockdown in 2020, more than 73% of small and medium-sized enterprises in the Philippines ceased operations.

 

Additionally, as of June 2021, 10% or so of the Philippines’ small and medium-sized businesses were closed. As a result, the government started initiatives to support small and medium-sized businesses. These initiatives are designed to aid their economic recovery from the consequences of the pandemic. Given that the business sector is one of the hardest impacted in the nation, understanding how to obtain a loan from the government for small businesses is helpful.

 

• Pagbabago and Pag-Asenso Pondo (P3)

The government offers money via the Pondo sa Pagbabago at Pag-asenso (P3) Program. This initiative supports microbusiness owners in the Philippines by providing them with small enterprise loans at competitive rates—only 2.5% per month.

 

This funding scheme also offers a different, quick and straightforward source of loans for small enterprises. The program supports small and medium-sized businesses in the Philippines, which are included in the micro-enterprise sector.

 

In response to the COVID-19 outbreak that led to a pandemic, the government also recently increased the scope of this program. Additionally, during and after the lockdowns, this program supports small running enterprises in the Philippines.

 

Furthermore, this initiative is run by SB Corporation, a DTI-affiliated agency. SB Corporation will reach out to recipients through its lending network and DTI Negosyo centers, in addition to setting up a program management office to oversee the funding.

 

Requirements:

• Application form
• Business Permit
• DTI registration
• Government-issued ID
• ID picture

 

• COVID-19 Assistance to Restart Enterprises (CARES) Program

 

Another option you can use to get a small business government loan is this one. Notably, this program has a budget allocation of 1 billion PHP. This initiative allows small and medium-sized firms to request loans with no interest. The funds are intended to aid their economic recovery from the consequences of the pandemic.

 

Through this government loan program for small businesses, microbusinesses with assets under PHP 3 million are eligible to borrow between PHP 10,000 and PHP 200,000. As long as their total assets don’t exceed PHP 15 million, small enterprises can also get larger loans of up to PHP 500,000.

 

 

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