BDO Business Loans Guide for Philippine SMEs

Business Growth
August 26, 2022

Small and medium enterprises (SMEs) needing a business loan have no doubt heard of BDO (BDO Unibank, Inc). This bank, once called Banco De Oro, is one of the largest and oldest private banks in the Philippines. They serve both businesses and individual customers through more than 1,000 branches nationwide.

Since BDO is nearly everywhere in the country, BDO business loans are likely included in your list as an option for funding your business operations. To help you make an informed decision, we’ve gathered details of BDO’s SME loans that apply to new borrowers.

Table of Contents

I. Which BDO business loans are included here?

II. What are the BDO loan requirements?

III. Is BDO loan application available online?

IV. How much can I get from BDO business loans?

V. What BDO business loans are available for SMEs?

VI. Summary

Which BDO business loans are included here?

  • BDO SME Ready Check
  • BDO Term Loan

What are the BDO loan requirements?

For most BDO SME loans, these are the basic requirements:

  • At least 21 years old but not exceeding 70 years old at the end of the loan term
  • Valid ID
  • Marriage contract (if applicable)
  • Application form
  • Business is in profitable operation for at least 2 consecutive years
  • Minimum annual gross sales of ₱1M
  • Business is within a BDO serviceable area
  • Appraisal and post-approval fees

In addition, there are different BDO loan requirements that depend on whether your business is a sole proprietorship, partnership, or corporation. Some of them are:

  • Audited Financial Statements
  • Certificate of Registration from SEC; Articles of Incorporation; or By-Laws 
  • Latest General Information Sheet
  • List of top customers and suppliers with contact information
  • Bank Statements from the last 6 months
  • Collateral documents
  • Company profile

View the full list of documentary requirements here: BDO Loan requirements 

Is BDO loan application available online?

BDO business loan application is available online; start by using the BDO loan calculator.

Yes, BDO loan applications can be done via the BDO website. You’ll be asked to answer a pre-qualification questionnaire on their website, which determines your type of business ownership, personal and company details, desired BDO business loan, and other information. You will also be asked to submit your BDO loan requirements via their website. After submitting, a loan officer should contact you to evaluate your data and guide you through the process.

You may also visit BDO branches or loan centers to complete your BDO loan application.

How much can I get from BDO business loans?

BDO business loans offer loan amounts starting from ₱1 million, and up to ₱20  million if supported by collateral. BDO accepts the following collateral assets: 

  • House and lot
  • Commercial property
  • Vacant lot
  • Condominium
  • Townhouse
  • Integrated commercial and residential property. 

Before starting your BDO loan application, it’s also best to use the BDO loan calculator. After you input your preferred loan amount and business purpose for the loan, the BDO loan calculator will show you your possible monthly repayments, interest rate, and other charges.

 

What BDO business loans are available for SMEs? 

BDO SME Ready Check

Type of loan: Secured credit line
Who can avail: Businesses with profitable operation for at least 2 consecutive years and minimum annual gross sales of ₱1 million
Loan Amount: ₱3 million to ₱20 million
Basis of Loan Amount: Up to 70% of real estate collateral value; loan purpose; current income
Loan Term: Payable monthly up to 1 year, with an option to renew. At least 5% of the availed amount must also be paid every quarter, in addition to documentary stamp tax (DST) and other fees
Interest Rate: 6.25%-7.25% per annum; after the initial fixing period, interest rate will be repriced annually

This BDO SME loan is a credit line, which means it works best for buying seasonal inventory, addressing operational expenses, and paying suppliers while waiting for customer collection.

Pros and Cons

The biggest advantage of BDO SME Ready Check is its annual interest rate, and high credit line limit of up to ₱20 million. Both can help SMEs finance more ambitious growth opportunities.  The minimum business income requirement of at least ₱1 million is also easier to access for SMEs.

However, this loan is riskier for SMEs due to the following reasons:

  • Collateral requirement. You need to put up real estate property to secure the loan, which you can lose if you default.
  • Short repayment term. Borrowers must have a clear repayment plan in mind, especially if they are granted large amounts but short repayment times.
  • Extra 5% loan payment per quarter. The irregular repayment scheme will mean your business will have less capital than usual every quarter.
BDO business loans can be risky for SMEs due to collateral requirements.

Another concern is BDO’s fees: a handling fee of ₱5,000; appraisal fee; processing fees; and additional Fire Insurance Premium and Contractors’ All Risk Insurance for your collateral.

BDO loan application takes up to 10 banking days before you can receive a loan decision, provided that you have submitted complete requirements beforehand. You also won’t qualify if your business has been operating for less than 2 years.

A faster and less risky alternative to BDO SME Ready Check is First Circle’s Revolving Credit Line. Even without collateral, you can borrow up to ₱10 million within 5 business days. Just complete our online application process and submit two initial documents to get a conditional credit line offer.

Our revolving credit line is also available to businesses of any age with at least ₱5 million in annual revenue. More importantly, our credit line offer is free and non-collateral. You won’t have to risk any assets, and you only pay interest on the portion of the credit line that you use. Because you won’t pay anything until you use your credit line, this also makes First Circle a good emergency fund option.

BDO Term Loan

Type of loan: Secured or unsecured term loan
Who can avail: Businesses with profitable operation for at least 2 consecutive years and minimum annual gross sales of ₱1 million
Loan amount: ₱1 million to ₱20 million
Basis of Loan Amount: Up to 70% of your real estate value
Loan Term: Payable monthly up to 10 years
Interest Rate: 6.25%-7.25% per annum; after the initial fixing period, interest rate will be repriced annually

BDO Term Loan is almost similar to BDO SME Ready Check, except with a longer repayment period and a lump-sum distribution of your funds. It is best used for large one-time purchases and long-term goals, such as real estate acquisition, purchase of new business assets, or construction of business facilities.

Pros and Cons

You’ll have a longer repayment period with BDO Term Loan than BDO SME Ready Check, which is important if you are using the loan for investments that won’t earn returns right away. 

If you need more than ₱1 million, the collateral requirement remains the biggest disadvantage. You’ll have to offer a high-value asset if you need very large loan amounts – and risk losing that asset in case you can’t pay. Similar to BDO SME Ready Check, you’ll also need to pay pre-approval and post approval fees, and wait 10 days before getting a loan decision.

Summary

While BDO business loans only require 2 years of operations and at least ₱1 million in annual sales, you can only get high loan amounts if you are willing to put up high-value real estate as collateral. In addition, you’ll have to consider their multiple requirements and fees, a 10-day loan application waiting period, and an irregular repayment plan for BDO SME Ready Check.

A less risky alternative to BDO SME loans is First Circle's Revolving Credit Line
Unsecured loans such as First Circle Revolving Credit Line is less risky, because you won't need to provide collateral before getting funding.

Identifying what you’ll use your funding for is also crucial here, as BDO SME loans have very different loan terms and purposes. BDO Term Loan is best for long-term goals and large expenses; BDO SME Ready Check is for funding short-term goals and day-to-day operations, opportunities, or cash flow gaps. 

If you find either of the BDO business loans unfit for your business needs, look into First Circle’s Revolving Credit Line. Our non-collateral SME loan has the following benefits: 

  • Up to ₱10 million of re-usable credit
  • Interest rates as low as 1.39% per month
  • Free application; you only pay for what you use
  • Application processing in 5 business days
  • Exclusive account manager
  • Minimal documentary requirements

‍First Circle is a multi-awarded lending company supporting SMEs since 2016. To apply for a Revolving Credit Line, click here.

Ready to get your own revolving credit line?

Apply 100% online, and get a credit line worth up to ₱5M. Use and re-use your credit limit anytime you need a business loan.

Apply for a Credit Line

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