A Comparison of Business Loan Lenders in the Philippines
Quick Answer
Key Takeaways
- Lender type matters. Banks, financing companies, loan apps, and government programs each vary in interest rates, speed of processing, and accessibility.
- Banks can offer good interest rates, but only if you are willing to provide collateral or have an existing client relationship.
- Financing companies offer the fastest and most accessible business loans. SEC-regulated financing companies such as First Circle can approve and disburse loans faster due to digital processing and different ways of assessing creditworthiness. In First Circle’s case, we also require less documents.
- Loan apps aren’t ideal for business financing. They are meant for small, short-term personal loans and come with higher effective rates than business loans.
- If your priority is no-collateral speed, First Circle's Business Credit Line offers up to ₱20 million, from 0.99% monthly interest, with drawdown in as fast as 1–2 business days.
Finding a suitable business loan in the Philippines can be a time-consuming process, with so many financing companies operating in both the public and private sector.
While interest rates and loan amounts remain the most critical factors, there are other things you should consider in shopping for a small business corporation loan. This ensures you get the best offer for your needs, without putting yourself at risk of defaulting.
What do I need to know before getting a business loan?
It's best to know the answers to the following questions before getting a business loan:
- How much money do you need?
- How soon do you need the money?
- What is the monthly interest rate that you can afford to pay?
- Are you willing to offer collateral to reduce your interest rate, or get a larger principal?
- How much are you willing to pay monthly, and for how long?
- Is your chosen lender reputable and regulated by the SEC or BSP? How fast can they disburse your loan?
How do I know how much money I need to borrow?
Add up your essential short-term costs — payroll, rent, supplier payments, utilities — for the period you need to bridge. Subtract any cash you expect to collect from receivables in that window. Borrow only the shortfall, not the full amount, to keep your interest costs down.
How do I know the right business loan for my needs?
Your purpose for the business loan will determine the right loan (and loan type) for your needs. For instance, term loans provide a lump-sum amount, making them suitable for large one-time purchases. Meanwhile, credit lines are better for managing day-to-day operational needs, such as covering cash flow gaps, increasing inventory, or repairing equipment. To know more about their differences, check out our guide to the types of business loans in the Philippines.
It's also worth deciding between a collateral or non-collateral business loan. Collateral loans require you to put up real estate or other assets to secure the loan — a higher risk to your business, but often in exchange for lower interest rates and bigger loan amounts. Non-collateral loans skip that risk to your assets, but typically come with smaller loan amounts, higher interest rates, and shorter repayment terms.
What's the best monthly interest rate for business loans?
In general, there is no single "best" interest rate – it all depends on your business revenue, whether your business loan is collateral vs. non-collateral, and whether you can afford to pay the resulting loan repayment terms without straining your cash flow.
In general, the lower the interest rate, the better — but only once you understand how a lender defines its terms. Rates quoted as "monthly" versus "annual," or "flat" versus "diminishing," aren't directly comparable. Learn more by checking out our full guide to comparing interest rates.
What's the best repayment term for business loans? Should I choose monthly or yearly?
There's no universal best; it depends on your cash flow. In general, a loan with a longer repayment period has lower monthly payments but higher total interest paid over time. A loan with a shorter repayment period has a lower interest cost, but larger monthly payments.
Most business loans also charge processing fees, plus appraisal and collateral registration fees for collateral-based loans. When comparing lenders, look at the total cost of borrowing — interest plus all fees — rather than just the monthly payment or the headline rate.
How do I choose the best financing company in the Philippines?
Financing companies in the Philippines vary in accessibility, ease of loan application, and speed of loan disbursement. The right one should help you go through the application smoothly; ensure you understand your loan's terms and conditions; and provide funds just when you need it.
One way to assess is by reading a company's Google Reviews to know their service quality — how fast they respond to inquiries, approve loans, or support clients through application, disbursement, and repayment.
What else should I prepare before getting a business loan?
Lenders ask for business registrations not just to evaluate your financials, but as a regulatory requirement. Any lender who doesn’t ask for them is not running a legal operation and must be avoided.
The registration documents most commonly requested are from the Bureau of Internal Revenue (BIR); Department of Trade and Industry (DTI) for sole proprietors; or Securities of Exchange and Commission (SEC) for partnerships and corporations. To know more, check out our guide to the most common business loan requirements.
Most lenders take on businesses which are already profitable or stable for at least 1-3 years. This reduces risks of borrowers defaulting on loans. Thus, startups or entrepreneurs that are just starting a business may not qualify for a business loan.
Before applying for any loan, verify that your lender is legitimate. Check that they're registered with the Securities and Exchange Commission (SEC) — you can confirm this directly on the SEC website or by calling their public assistance line. Be wary of lenders who don't ask for proper business registration documents (BIR, DTI, or SEC), as this is a regulatory requirement, not an option.
Also confirm that whoever you're speaking with is an actual representative of the company. Legitimate lenders won't ask you to transact through personal accounts, third-party agents, or unofficial social media pages. If in doubt, verify their identity through the lender's official website, hotline, or email address before sharing any documents or making a payment.
Frequently Asked Questions
Who offers the best non-collateral business loan in the Philippines?
Not to toot our own horn, but First Circle's Business Credit Line is the clear leader for SMEs looking for non-collateral financing. It has the lowest pricing (as low as 0.99%), a high credit limit of up to ₱20 million, and zero application fees. Many of our clients use their credit line as an emergency fund to secure their business, since they can choose to borrow from it at any time (or not at all).
Who offers the best collateral business loan in the Philippines?
For businesses looking for collateral financing, there is unfortunately no single answer. Collateral loan offers and interest rates depend heavily on the borrower’s business and collateral, as well as the lender and current economy. In general, however, banks historically offer the best rates for collateral loans — especially if you have an existing client relationship with one.
Still, we highly recommend shopping around for the best interest rate you can get. Unlike non-collateral loans, secured loans can't be compared as easily!
Which business loan provider has the fastest loan application process?
In general, online business loan providers process applications fastest, since they rely on digital document submission and automated underwriting rather than branch visits and manual appraisal. Traditional banks can take weeks to process a loan, especially if you are applying for a collateral loan.
Our company, First Circle, is built around this speed. Complete our short online application form and you'll hear from us in just 1-2 business days, compared to the average 3-20 business days from other providers. Once your dedicated account manager reaches out regarding your application, you'll only need to submit a few business documents online to receive a conditional credit line offer. In contrast, other providers only reveal your final loan amount and interest rate at the very end of the process.
What is First Circle's business loan offer?
First Circle’s Business Credit Line is a non-collateral SME loan that funds your plans and cash flow gaps whenever you need it. It has the following advantages:
- Get up to ₱20 million of reusable credit for as low as 0.99%
- Free to open and requires no usage commitment
- Processing of applications in 1-2 business days
- Exclusive account manager
- Minimal documents and no collateral requirements
First Circle Growth Finance Corp. is a financing company with SEC Registration No. CS201605477 and CA No. 1108. It is regulated by the Securities and Exchange Commission with the email flcd_queries@sec.gov.ph. For any questions, you may reach out to support@firstcircle.com.
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