We’ve all had our dream businesses and goals in our head, but sometimes one thing can hinder us from pursuing them: money. A big part of starting or managing a business is making sure that you are well-funded. This can be tricky, as most aspiring entrepreneurs usually don’t have the capital to start.
But don’t worry, preparing for a business loan is a great way to get you started. Here are the key steps to prepare and get your business loan approved:
1. Ask yourself some questions
Getting a business loan is a serious business. You need to be sure before you actually apply for one. Before you do so, ask yourself a few of these questions:
- Can you afford the payments?
- How much are you going to borrow?
- Why are you borrowing the money?
- Do you have a good credit history?
2. Decide on which loan fits you and your needs
There are different options when it comes to business loans. Do your research and compare which ones are fit for your needs. Here are some types of loans in the Philippines:
- Term Loan. This lets entrepreneurs keep their own funds safe while meeting their short-term or long-term business funding needs. This will spread out their loan payments in regular installments.
- Credit Line. This is a short-term loan that lets you pay the interest on the amount that has been used, giving you greater financial control.
- Secured Business Loans. This requires collateral such as your house or car, giving it a low-interest rate and higher loan amounts.
- Unsecured Business Loans. This does not require collateral, but it has a higher interest rate, shorter loan terms, and lower loan amounts versus those that require collateral. This is also harder to qualify for.
3. Look for options
Now that you’ve settled on what kind of loan you want to get, it’s time to look for lenders. Narrow down your search by looking for lenders that offer the type of financing that you want and one where you will most likely get approved. The RFC business loan is a great option to apply for since it has low-interest rates and no collateral is needed.
RFC has been at the forefront of financing for 55 years, assisting Filipino business owners around the Philippines. You can apply for an RFC business loan here.
4. Gather your documents
You’ve decided, you picked a lender, now it’s time to prepare your requirements. This will vary from lender to lender, but make sure that you have a list of the documents needed and have your own personal copy of it. In the Philippines, here are some of the basic requirements:
- Valid government ID
- Proof of Business Billing Address
- DTI or SEC Certificate
- BIR Certificate of Registration
- Photocopy of audited financial statements
- Business background/company profile
- Accomplished loan form
5. Apply for your loan
Once that you have your requirements, it’s time now to apply for your business loan. Among those that you qualify for, choose the ones with the lowest annual percentage rate and submit the requirements.