Update, March 2023: DTI's financing arm, Small Business Corporation, no longer lists RISE UP Turismo and HEROES Loan under their MSME loan offers. The P3 Program, while still listed under DTI and SB Corp's websites, is currently not accepting applications.
Micro, small and medium enterprises (MSMEs) comprise 99.5% of businesses in the Philippines, employing at least 63% of our labor force. Sadly, despite these numbers, this sector suffers from a major lack of financing opportunities.
To address this issue and stimulate MSME growth, the Department of Trade and Industry (DTI) – through their financing arm Small Business Corporation (SB Corp) – developed various DTI loans for MSMEs. Aside from reviving businesses that were affected by the pandemic, these DTI business loans also provide special interest rates to MSMEs in different industries and stages of growth.
DTI business loan requirements vary depending on the loan you are taking. Most require the following:
For loans exceeding ₱100,000:
The following corporate documents are also required from specific applicants:
DTI online loan applications are now available at SB Corp’s official website. Just create an account at their website, choose the MSME loan that you would like to apply for, and complete the online DTI loan application form. After submitting your DTI loan application form, an SB Corp officer should contact you regarding your application.
DTI MSME loans can provide you as much as ₱10 million for collateral financing and ₱5 million for non-collateral financing. However, the final amount of your DTI MSME loan will vary depending on the following factors:
Do note that some DTI loans also have a one-time processing fee of up to 8% of your final loan amount.
Type of loan: Unsecured term loan
Who can avail: Multi-sectoral micro-enterprises in business for at least 1 year
Maximum Loanable Amount: Up to ₱300,000
Basis of Loan Amount: Up to 20% of existing business asset
Loan Term: Payable monthly up to 3 years
Interest Rate: 12% per annum
*A Barangay Micro Business Enterprise (BMBE) Certificate proves that you are a business entity with an asset size of not more than ₱3 million. Having one exempts you from paying income tax on your business income. It also gives your business access to special credit opportunities at DTI and other government lending institutions.
This DTI business loan is the most accessible to MSMEs due to its low entry requirements, long payment term, and affordable interest rate. However, the maximum loan amount can be low for MSMEs that need the money for rapid expansion or bigger purchases. Applicants are also limited to MSMEs with at least one (1) year in operations.
Type of loan: Unsecured term loan
Who can avail: Multi-sectoral SMEs in business for at least 2 years
Maximum Loanable Amount: Up to ₱2 million
Basis of Loan Amount: 15% of prior year sales, based on BIR-filed FS
Loan Term: Payable monthly up to 3 years
Interest Rate: 12% per annum
This DTI loan offers a larger amount to SMEs while maintaining an affordable interest rate. However, the 2-year business duration requirement may be harder to meet. If you have been in business for less than 3 years, try applying for First Circle’s Revolving Credit Line. Aside from a fast and free application process, businesses of any age with at least ₱5 million annual revenue may apply.
Type of loan: Unsecured and secured term loan
Who can avail: Existing SB Corp borrowers in good standing, with at least six (6) months' repayment record
Maximum Loanable Amount: Up to ₱5 million for unsecured; up to ₱10 million for secured
Basis of Loan Amount: Latest approved loan; up to 15% of prior year sales, based on BIR-filed FS
Loan Term: Payable monthly up to 5 years
Interest Rate: Up to 12% per annum
You have a wider range of loan amounts to choose from, making it a good fit for large one-time purchases. However, this loan is limited to SB Corp borrowers, and has a longer application process due to the additional government requirements. A secured loan also puts the borrower at a higher risk, since you can lose your real estate asset if you default on your loan.
There are 2 types of DTI loans under RISE UP Tindahan:
DTI loans under RISE UP Tindahan have a lower interest rate than their multi-purpose loans. However, they limit applicants to sari-sari stores, groceries, supermarkets, dealers, and distributors with FMCG accreditation and transactions for a year or more.
Type of loan: Unsecured term loan
Who can avail: Micro entrepreneurs operating for at least 1 year
Maximum Loanable Amount: Up to ₱200,000 (as per SB Corp website)
Basis of Loan Amount: Business size and ability to pay
Loan Term: Payable monthly up to 30 months
Interest Rate: 2.5% interest rate per month
The P3 Program was first launched by DTI in 2017 to protect micro enterprises from informal lenders. The funding was granted to micro enterprises for business expansion or inventory procurement.
In 2020, the P3 Bayanihan CARES (COVID-19 Assistance to Restart Enterprises) Program replaced the original P3 program to finance pandemic-affected MSMEs. However, the program ended in January 2022 after the program funds were exhausted.
The P3 Program for micro enterprises is still listed on DTI's website. However, it is unclear whether they still accept applications.
From the DTI loans listed above, RISE UP Micro Multi-Purpose Loan and RISE UP Multi-Purpose Loan for SME First Time Borrowers are the most accessible to SMEs. In addition to an affordable interest rate (12% per annum) and 3-year payment terms, they have no industry limitations.
The maximum loan amount of RISE UP Micro Multi-Purpose Loan, however, may be too low for SMEs that need more than ₱300,000 for rapid expansion and bigger purchases. To ensure you’ll have enough funding, you can get a supplementary short-term, non-collateral Revolving Credit Line from First Circle. Aside from free application, our revolving credit line is valid for 12 months. You have the option to use it whenever the business need arises – or not to use it at all, if your DTI loan turns out to be enough.
The RISE UP Multi-Purpose Loan for SME First Time Borrowers offers up to ₱2 million, but limits applications to businesses with 3 years in operations. Unfortunately, this requirement is also common among other lenders. If you have been in business for less than 3 years, consider our Revolving Credit Line. New and old businesses are welcome to apply, as long as you have an annual revenue of at least ₱5 million and the proper business registrations.
A major benefit of DTI business loans is the grace period they offer with most of their loans. Some of the loans listed here can grant as long as 12 months’ grace period before beginning repayments. This gives SMEs enough breathing space to plan what to do with their business funding.
Bear in mind, however, that SB Corp receives a large number of applications nationwide. On their Facebook page, SME applicants report that application processing and disbursement can take months. Some applicants mentioned that they cannot register on the website to begin their online loan application process. Other borrowers complained that their latest payments and loan balances do not reflect accurately on their SB Corp online accounts – ruining their credit standing or preventing them from applying for another loan even if they are good payers.
To augment your DTI loan and ensure you have enough funds for your business needs, let First Circle’s Revolving Credit Line help. Our non-collateral SME loan has the following benefits:
First Circle is a multi-awarded lending company supporting SMEs since 2016. To apply for a Revolving Credit Line, click here.
