How First Circle can offer low business loan interest rates

Business loans are not hard to find in the Philippines — any business owner can do a cursory Google search and discover competing loans from multiple banks and financial institutions.

The real search, however, is for lending institutions offering business loans with low interest rates. If you haven’t checked out our guide to interest rates, a loan interest rate is the fee you have to pay as a borrower to use someone else’s money right away. Most lending companies in the Philippines quote their price in interest rate percentages; a lower percentage means that you’ll pay less fees on top of returning the money you have borrowed.

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What determines a business loan's interest rate?

Your loan interest rate varies depending on the following factors:

Your financing partner

‍Most interest rates boil down to which lending company you choose to approach. Lenders known for loans with low interest rates often lend with a tradeoff to prevent loan defaults and profit losses. They may lend smaller loan amounts, for instance, or be highly-selective with clientele. Other lenders that make it easy to borrow, meanwhile, may charge a higher interest rate due to higher chances of borrower default.

Your chosen loan product

‍Lenders apply different interest rates to their loan products depending on their features, limits, duration and pricing. Loans without collateral (also called unsecured business loans) and loans with longer payment terms will often have higher interest rates. In addition to higher chances of loan default for longer payment terms, the Monetary Board may also mandate dramatic changes to the overnight lending interest rate over time — which also affects the price at which banks borrow.

Your risk profile‍

Lenders have their methods in determining a borrower’s capacity of paying — and paying on time. New borrowers, businesses with a history of late payments, and businesses viewed as high-risk are often assigned higher interest rates. This is not a cause for alarm; rather, it gives you a chance to re-calculate the profits you may gain by taking the loan, versus not borrowing at all.

As you pay your loans on time and establish a good working relationship with your lender, your risk profile will also improve— which can lead to a loan with lower interest rate the next time you borrow.

Government mandates

‍Under extraordinary economic and social conditions, government agency policies can also affect loan interest rate. The Bangko Sentral ng Pilipinas (BSP), in particular, mandates the maximum interest rate that banks and financial institutions are allowed to charge. For instance, in March 2022, BSP mandated a 2.5% lending interest rate ceiling to ease the financial burden on businesses that are affected by the COVID-19 pandemic.

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How does First Circle offer low interest rates?

At First Circle, first-time borrowers can access up to Php 20 million in credit for as low as 0.99% interest rate per month.* We make this possible through the following:

By choosing good customers

First Circle employs creative methods, such as quick financial assessments and an innovative risk underwriting system, to find good customers.

In particular, we seek businesses on the blade years of the Hockey Stick growth curve (see below) — small and medium enterprises with a strong potential to turn into larger enterprises, promising runways, and sustainable growth opportunities. By solving the working capital needs of these clients, we help our clients move through their growth inflection point.

One of the most important things we do is a consultation call to our potential clients to assess if additional funding will actually be beneficial to their bottom line. Through this and other quality checks, we acquire high-quality clients and become a dedicated growth partner to their business.

Because we genuinely believe in our clients’ potential for growth, we are also more willing to make reasonable adjustments with their loan structure. We have dedicated account managers for this purpose. Our mutual trust with our most loyal customers have also resulted in lower interest rates for their loans over time.

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By providing specialized products

Every lender has different loan products meant for different purposes: SME business loans, bridge loans, commercial bank loans, or capital loans, for instance. But First Circle’s financing options go beyond term durations and purposes to actually meet the inner workings of your business. This gives us more leeway to offer loans with low interest rates, in addition to better payment terms.

First Circle's Financing Products

Business Credit Line‍

Our non-collateral Business Credit Line gives you flexible, ongoing access to funds. One of our credit line's biggest advantages is that it is free to open and maintain — making it a perfect emergency fund or standby facility for new projects, future expansion plans, or unexpected cash flow gaps. You pay nothing unless you use it, and we won't require any usage commitment from you too.

Another advantage is that you'll only need to apply for a Credit Line once. Most business owners do not have the time to re-apply for funding any time they need to cover unexpected cash flow gaps or dwindling inventory. As soon as your credit line is granted, you can withdraw multiple business loans from it any time. And when you do, our interest rate (which only applies to the amount you used) can go as low as 0.99% per month.

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Business Credit Plus

‍A non-collateral business loan for larger growth moves — expansion, new markets, or equipment and asset purchases. Offers up to ₱20 million, with terms up to 24 months, no collateral required, and monthly interest as low as 1.49%. Includes early repayment rebates.

Express Business Loan

‍A short-term bridge financing option with same-day approval and drawdown in as fast as 24 hours. Uses a zero-interest, one-fixed-fee structure — no hidden costs — with repayment within 1 month and a 0.5% rebate for early repayment.

Credit approval, limits, and rates granted may vary upon assessment based on existing First Circle policies.