7 Financing Sources for SMEs in the Philippines

Business Growth
May 8, 2023

From the ideation stage to the takeoff stage, all small and medium enterprises (SMEs) need continuous project funding to maintain and eventually achieve profitability.

Depending on the growth stage of your business, you can be eligible for one or two financing sources. Here’s a primer on the most common financing sources to help you find the best fit for your business. At the end of this article, you’ll also find a summary list of financing companies in the Philippines that you can approach.

Table of contents
I. Personal Savings
II. Private Investors
III. Business Grants
IV. Credit Cards
V. Business Loans and Credit Lines
VI. Angel Investors
VII. Venture Capitalists
VIII. A List of Financing Companies in the Philippines

1. Personal Savings

For businesses in the ideation and startup stages

When starting a business, many entrepreneurs rely on their own money or personal savings for capital. Your personal savings can come from your salary from a part-time or full-time job, cash gifts from family and friends, interest rate income from your savings and investments, and/or sales of assets and personal belongings.

Most MSMEs use their savings as a financing source of capital or growth financing

2. Private Investors

For businesses in the ideation, startup and survival stages

Private investors are family, friends, or acquaintances in your network with the capacity to invest in your business idea.

It’s best to prepare a written business plan that explains your idea, growth projections, estimated return-on-investment (ROI), and potential risks. This makes it easier for private investors to consider investing. In addition, decide early on if you want investors to take an active role. Not all investors have the right experience and knowledge to support your business, which can cause management issues down the road.

The amount of project funding you can get at the startup stage may be low. However, once your business is in the survival phase – meaning you have already demonstrated that your product or service is viable, but your revenue and expenses haven't balanced out – you can ask for more funds.

3. Business Grants

For businesses in the ideation, startup, and survival stages

SMEs in select industries can avail growth financing for free or for low interest rates. These come from government agencies and private institutions or foundations looking to boost certain industries.

Depending on the business grant program, these financing sources can either help launch your business or fund its growth through research and development. The amounts are often small and only meant to give your business idea a leg up. In addition, applications are highly-competitive. Most grants also focus on certain industries, sectors, or advocacies, or in business ideas with high potential for mass production. An example of a grant program is the HEAL (Health, Education, Arts and Livelihood) Program of Metrobank Foundation, Inc.

Business grants are a form of investment financing, but they are very competitive.

4. Credit Cards

For businesses in the survival stage

A credit card is a type of loan financing that allows you to borrow a set amount whenever you need it. You must repay the minimum amount due, interest rate, and accompanying fees on every billing cycle.

With a personal credit card, you may not have enough for starting capital, but you can still use it to pay for goods, services, and other short-term business needs. Some financing sources offer a corporate credit card, which is limited to businesses that meet certain revenue requirements. Corporate credit cards have a higher credit limit and can be used by multiple cardholders for covering cash flow gaps and sudden expenses.

You can get a credit card from most local banks in the Philippines. Choose one with no annual membership fees and features that benefit your purposes the most – whether it’s 0% interest installment, frequent flyer miles, or cashbacks from gas stations.

5. Business Loans and Credit Lines

For businesses in the survival and growth stages

Aside from personal savings and private investors, business loans are the go-to funding for most SMEs. Financing sources range from the government, traditional banks, neobanks, and private lending companies. 

A common misconception is that startup business loans can be availed to launch a business. In reality, most financing sources with startup SME loans only offer them to SMEs with a history of profitability and stable operations. 

Business loans in the Philippines are often limited to companies with a history of profitability.

There are two types of business loans: term loan and credit line. A term loan is a large lump sum loaned upfront. In exchange, you make monthly or quarterly repayments plus interest over a set period of time. A credit line is a pool of money that you can dip into any time for any business-related expense. You repay only what you use plus interest. Once your dues are repaid, your credit limit is replenished to full value.

You can apply for loan financing in over hundreds of legitimate financing sources, so a lot of research is needed to ensure you get the best business loan for your needs. DTI’s RISE UP Micro Multi-Purpose Loan, for instance, offers up to ₱300,000 with 12% interest per annum. First Circle’s Revolving Credit Line, meanwhile, is the top choice for SMEs looking for low-risk non-collateral financing, offering up to ₱10 million for as low as 1.39% interest rate per month with no application fees. If you need amounts beyond ₱10 million, you can consider BDO Term Loan, which offers up to ₱20 million if you can provide real estate collateral.

6. Angel Investors

For businesses in the survival and growth stages

Angel investors are wealthy individuals or groups that finance startups and small businesses in the long term. Most angel investors are focused on developing a product or service that can gain traction in the market. Thus, they are likely to fund financially-stable businesses looking to grow and commercialize.

Angel investors can be local or foreign professionals, company executives, or seasoned business owners. They can provide sound business advice to reduce your risks and maximize profits, and link you to important suppliers and new clients.

Unlike credit cards or loan financing, you won’t have to pay back investment financing. Angel investors offer up to millions from their personal funds or business profits in exchange for a consistent percentage of your profits, a certain level of ROI, and/or equity ownership. 

You can pitch your business idea to a network of angel investors to have bigger funds. Manila Angel Investors Network Inc. (MAIN), for instance, evaluates business ideas related to 16 industries such as financial inclusion, entertainment and education. You can also join business clubs and networking events in your industry to meet angel investors.

7. Venture Capitalists

For businesses in any stage of growth

Venture capitalists are firms offering millions to billions in investment financing, as well as guidance in more complex business concepts, to bring a company to early or mature stages of growth.

Unlike angel investors, who develop a single product or service to bring to the market, venture capitalists create a range of products and services to diversify their chosen company’s portfolio and make it a market leader. In return for their investment, venture capitalists ask for a higher level of ROI and equity ownership.

Venture capitalists choose unique SMEs to put growth financing in, often in the technology space.

Most venture capitalists invest in any stage of a company’s growth, preferring to look at its long-term potential for growth and innovation over current profitability. In recent decades, it has been the norm for emerging businesses and startups in the technology industry to go for venture capitalists over traditional financing sources. An example is Kickstart Ventures of Globe Telecom, which funds startups disrupting traditional industries like finance, health, media, and telecommunications.

A list of financing companies in the Philippines


Financing Sources

Financing Companies in the Philippines

Business grants

Metrobank HEAL Program

DTI Rice Farmer Financial Assistance (RFFA)

Start Up QC Program

Pampuhunang Ayuda sa Taga-Pasig

Corporate credit cards

Unionbank, BDO, BPI Corporate Credit Cards

Term loans

DTI SB Corp RiseUP Multi-Purpose Loan 

BDO Term Loan

BPI Term Loan

Metrobank SME Business Loans

Credit lines

First Circle Revolving Credit Line 

BDO SME Ready Check

BPI SME Credit Line

Maybank Revolving Credit Line

Angel investors

Manila Angel Investors Network Inc. (MAIN)


Ray Alimurung

Angels Investment Network PH

Venture capitalists

Kickstart Ventures

Core Capital

First Asia VC

Golden Gate VC




With the right financing sources, SMEs in any stage will have an easier time achieving growth and reaching profitability. 

For businesses in the Philippines in the ideation and startup stage, personal savings, private investors, and grants are your best options for modest amounts of project funding.

Businesses in the survival stage – those who are trying to make money consistently to break even and achieve profitability – will have additional financing sources to choose from, such as business loans, corporate credit cards, revolving credit lines, angel investors and venture capitalists.

Startups and SMEs in the technology space have a better chance of getting investment financing from angel investors and venture capitalists. SMEs in any industry can get loan financing as long as they can present consistent annual revenue numbers or meet other profitability requirements.

Whichever industry or growth stage you are in, make sure to review your finances and purpose for seeking growth funding. This will make it easier for you to find the right financing sources in the Philippines, and get better deals for project funding.

Need funding to support your business growth? First Circle’s Revolving Credit Line is an SME loan that funds your plans and cash flow gaps whenever you need it. First Circle can provide up to ₱20 million of re-usable credit for as low as 0.99% per month in as fast as 3 business days. Apply for a Revolving Credit Line today.

Ready to get your own revolving credit line?

Apply 100% online, and get a credit line worth up to ₱20M. Use and re-use your credit limit anytime you need a business loan.

Apply for a Credit Line

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