Financing In The Philippines
Raising money to run a business has always been a key issue for any businessmen. In the Philippines, entrepreneurs have come up with different methods on raising the needed money for starting a business. Each with its own advantages and disadvantages, these methods is proven to work and are chosen by Filipinos based on their capacity to gain back the spent money. Here's a list of practical sources and ways on how financing is gained by entrepreneurs in the Philippines:
Lending from Bank - whether you are a small enterprise or a big one, applying for a bank loan is one of the most frequently sought after means for gaining funds for starting or expanding a business. There are ways of ensuring loan approvals from the bank, like collaterals, post-dated checks, promissory notes, personal guarantors and co-makers. This also affects the amount of loan that the bank is willing to approve. Personal Loans - This comes from securing a loan deducted from salaries or personal savings. Some business ventures, like direct-selling, offer a credit line wherein they can get items first and pay later. Loans from Government agencies - Loans are applied from national agencies like the Government Service Insurance System (GSIS), Pag-IBIG Fund, and Social Security Systems (SSS). Payment can be deducted from salaries, or paid personally by the counter. Credit Card - Credit card companies are now very competitive in attracting prospective clients, like offering zero or low interest on certain item purchase, and an easy payment scheme. One can use this opportunity to acquire tools and materials for use in the business, provided that they ensure that the productivity gained from it outweighs the interest payments made. Personal Savings - considered as the safest and most practical means of raising money, one does not worry much on any interest or principal payments, and has nothing to loose but the money spent when the business fails. Personal savings earned from other work can be put into a bank account, with the interest earned used for financing. Joint ventures - common to people who share the same business ideals and likes, pooling together individual resources has a better shot at starting a business since the effort is divided among them. This method is based on mutual trust, with agreements and mostly a joint bank account. Other loan agencies and loan programs - With small businesses sprouting like mushrooms, private loan agencies have also started to offer means of providing financial assistance to them. Higher loan amount and small interest rate was the name of the game for these agencies that are locked in a fierce competition to provide the best loan programs. Micro-financing is also common nowadays in support to those who are in need of capitalization for small to medium businesses. |