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Startup Financing Options in the Philippines

July 28, 2015 | Sharon Cheong

You may have a remarkable idea, a great business name in mind and be all ready to go ahead and build your own small business in the Philippines. This is not uncommon. Where most people get discouraged is when they go to get funding for their startup.  Funding can be complicated for a brand new business idea. Nowadays, lenders want assurances and/or collateral. You may have property or investments that could work as loan security. 

Best Funding Options 

For those who have a good credit rating and a sound business plan, the best place to start is with a traditional lender. This includes banks, Micro-Finance Institutions, cooperatives, and reputable loan companies. If you have the right credentials and good credit, a lender may be able to extend a loan for your startup costs. In some cases, it's more beneficial to ask for a line of credit (LOC). That way, you aren't paying interest on money you don't need yet. The money is accessed as you need it. Be sure to ask for repayment terms that you can handle. 

Credit Cards 

In some cases, it may be best to use credit cards to pay for certain expenses. You might be able to lease an office or commercial space using credit cards as well. Furniture and equipment can also be placed on credit cards. It's best to leave some room open on your cards for emergencies and those weekly unexpected expenses. It can take up to six months or more before a new startup begins to see a profit, so prepare a budget that can carry you through. 

The Government 

The Filipino government does have several schemes for small business owners that can help them get the financing they need to get up and running. These are usually only available to Filipinos, but exceptions have been made in the past. Government loan programs require much the same documents and credit worthiness as a regular lender. The Business Development Loan Facility is the lending agency of the Filipino Social Security System (SSS). It works to help invigorate the country's economic stability and encourage the nation's economic growth. Visit their website to learn about the programs available and requirements for each. 

Family and Friends 

Many business owners get their start by going to friends and family members and presenting their ideas and financial needs. In order to be successful, have a compelling business plan and be willing to sign official paperwork to repay the loans. Though this can be a good way to get started, if you are not able to repay the money in a timely manner, it can cause a rift in your relationships. For this reason, many experts say to use this idea only as a last resort. Try to get the business up, running and generating a profit as quickly as possible so you can repay the borrowed funds. 

Save on Office Expenses 

Avoid having to buy expensive furniture and hire office personnel by leasing your office space from Servcorp Serviced Offices. As a leader in serviced office spaces around the globe, Servcorp makes it easy to set up your business. You can get bi-lingual employees, luxurious furnishings, stable internet and phones and many other amenities, all for just one low monthly fee. Servcorp also has meeting rooms and board rooms available when you need them so that you can entertain important clients and investors in style. Call +63 2 368 5700 to learn more.