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Building a Small Business: Important Things To Know When Getting a Loan

By Eric Perez

Table Of Contents

  1. Introduction
  2. Profitable Small Business Ideas
    • Arts and Crafts Store
    • Online Selling
    • Food -Related Business
  3. Getting Enough Funding for Starting a Small Business
    • Who Is Qualified To Get a Loan?
    • What Are the Requirements?
    • How Much Will Be Loaned to You?
  4. Tips for Acquiring a Small Business or Startup Loan
    • Do Ample Research
    • Be Ready To Explain How You Can Pay
    • Be Honest With the Lender
  5. Cebuana Lhuiller Kanegosyo Center: Helping You Start Your Business
  6. FAQs When Getting a Loan for Starting a Business
    • How Much Do I Need To Start a Business?
    • What Are the Repayment Terms for Business Loans?
    • How Can I Calculate the Interest Rate for My Loan?
  7. Conclusion


Many Filipinos turn to entrepreneurship to find another source of income. It provides some relief for the effects of inflation and the lack of job opportunities in the country. Starting a business also doesn’t just benefit those who start them but also their children and would-be descendants. New enterprises also provide employment options for those who are looking for work.

However, setting up a business entails much effort, patience, and sacrifice. It doesn’t come without hurdles. For many aspiring entrepreneurs, some of these obstacles include lack of manpower, staunch competition, lengthy business registration and licensing processes, and – arguably the biggest hurdle of all – limited financial resources.

One way to get past this challenge is to get a loan from banks and private lenders. You can also seek help from other financial institutions like Cebuana Lhuillier Kanegosyo Center, an online platform offering comprehensive solutions to people who want to start or grow a business. Continue reading to learn what you need to know about getting a loan to start your business here in the Philippines.

Profitable Small Businesses Ideas

A successful enterprise starts with a profitable business idea. Here are some of the most lucrative small business ventures you can try:

Arts and Crafts Store

There’s always something about handcrafted products that spark joy in people. If you have a talent for creating accessories or art pieces, starting an arts and crafts store might pique your interest. You can offer a wide array of goods, including jewelry, pottery, woodcraft, wall art, clay and resin products, scented candles, as well as crocheted keychains, bags, and wallets. The possibilities are endless as long as you’re crafty and imaginative!

Online Selling

Many online sellers have had massive success selling a range of items on the internet. One good thing about this idea is that there’s no need to rent or build a physical store to sell your products. E-commerce platforms have also made online selling relatively easier for sellers by providing them with the necessary technology and resources, such as partnerships with delivery services.

Food-Related Business

If you have a hand at whipping up delectable dishes or baked goods, why not use this skill to augment your income? Food-related business always have a high chance of being profitable because the market for this enterprise is expansive. Filipinos love food, and it’s a product that’s repeatedly bought. Plus, another advantage of food businesses is that you don’t have to have a physical shop to sell your products.

Getting Enough Funding for Starting a Small Business

Getting sufficient funding is crucial before you officially jumpstart your entrepreneurial journey. One viable option for Filipinos is to borrow money through a business loan. If it’s your first time, you most likely have a couple of questions about the process of obtaining a loan to start a business in the Philippines.

Who Is Qualified To Get a Loan?

To properly secure a loan, you will need to meet a couple of criteria. While they typically depend on the lender, these financial institutions usually consider the following:

  • Age – at least 21 years old
  • Employment Status – regular/permanent status for at least a certain time period
  • Character – refers to your moral standing
  • Capacity To Pay – the ability to accomplish repayment terms
  • Capital – your financial strength (ideally, the amount of what you own should be higher than what you owe)

What Are the Requirements?

Likewise, this will depend on the loan provider. Nevertheless, some of the common requirements to be provided by those who want to get a loan are:

  • Government IDs
  • Proof of Income
  • Certificate of Employment
  • Business or DTI Permit
  • Application for Registration of Business Name

How Much Will Be Loaned to You?

Again, this will depend on the loan provider and the type of loan. But you can possibly loan money amounting to a few thousand to over a million pesos, depending on your circumstances.

Tips for Acquiring a Small Business or Startup Loan

If you believe you have the requirements to get a loan to start your business in the Philippines, it will benefit you to read the following tips below to help increase your chances of getting approved.

Do Ample Research

Before you enter into a loan agreement, it’s essential that you take the time to conduct thorough research on the different types of small and easy business loans for startups. Learn about the important details that go with each. Interest rates, repayment terms, and loan maturity dates are just some of the aspects you need to be familiar with before you commit to a business loan.

Moreover, don’t just focus on the interest rate. Make sure you inquire about any other charges you may have to pay, such as processing fees and late payment fees. It would be helpful to know how flexible the lender can be in terms of repayments, just in case you cannot meet them on schedule.

Be Ready To Explain How You Can Pay

Lenders will want to know your capacity to pay the loan you wish to secure. Thus, be prepared to explain and prove your capability to pay the loan you want to get, especially knowing that you’re just starting to build your business from the ground up.

For instance, you can provide documents that’ll showcase how your business can still be sustained even during off-peak seasons or challenging periods where you fail to meet your projected sales. Being prepared with a detailed business plan, complete and well-presented with important financial information, can help you immensely.

Be Honest With the Lender

It can be tempting to exaggerate your financial standing and capabilities to repay your loan just so you can get approved. However, you must remain honest with the lender about your claims. Not only is this the right thing to do, but it will also protect you from any problems arising from dishonest or misleading statements.

If you have present or past issues that can potentially affect your application, you can go ahead and share them since they will most likely come out eventually. Information that can negatively impact your loan application will not necessarily make you unqualified. Remember, it is important to be honest from the get-go rather than be forced to explain later. And if you become rejected, don’t give up and move on to other loan providers.

Cebuana Lhuillier Kanegosyo Center: Helping You Start Your Business

Speaking of loan providers, aspiring business owners who want to borrow some money should check out Cebuana Lhuillier Kanegosyo Center. What makes us different from typical lenders is that our vision is to make every Filipino’s entrepreneurial dream a reality. Our services are tailored specifically for business people, whether they’re looking to start or expand their business.

In other words, we can be your all-in-one business partner! If you need a startup business loan in the Philippines, we have the Simula Bundle for you. Do you need business coaching? You can check out our Kanegosyo Coach services. Are you having difficulty meeting government requirements for your business? We provide regulatory assistance through Kanegosyo Assist.

All you need is to become a Kanegosyo Center member, which we offer for free with no expiration.

FAQs When Getting a Loan for Starting a Business

How Much Do I Need To Start a Business?

This will depend on the type of business you wish to start. For instance, if you’re looking to start a baking business, expect capital that can go as high as ₱40,000 or more since you will need special equipment, such as a stand mixer and oven. Other business ventures wherein you’ll need ₱20,000 or higher include graphic design, rice retailing, and tailoring services. For capital of around ₱10,000 or less, you may consider opening a sari-sari store or selling homemade snacks.

What Are the Repayment Terms for Business Loans?

Terms of repayment vary depending on the loan provider and the type of loan product. For short-term business loans, the repayment period can be 3 to 18 months. Long-term loans, on the other hand, can have a repayment period of up to 25 years.

How Can I Calculate the Interest Rate for My Loan?

Many lenders include a loan calculator on their websites, which you can use to calculate the interest rate for your loan. Meanwhile, if you wish to know the simple interest for your loan, you can do so by following this formula: principal loan amount × interest rate × loan term = interest.


With Cebuana Lhuillier Kanegosyo Center, your dream of becoming a business owner becomes a step closer to reality. With our packages and products, We make the process of building a business simpler and more accessible. If you’re interested in becoming a Kanegosyo Center member, don’t hesitate to reach out to us today!