PHILIPPINE SMALL BUSINESS AND BAD CREDIT HISTORY
In an economy like the Philippines, capital is scarce among entrepreneurs, they often results to borrowing from “Bombay” or Philippine Resident Indians who thrive on financing micro businesses with skyrocket interest rates as high as 20% per month.
Can business apply for soft loans or grants from the government? With regards to grants it depends on your kind of business. If you are a for-profit business, then you do not qualify for a government grant. While there are many soft loans available in the country.
However, the Government in collaboration with foreign agencies does provide grants to “…nonprofits, institutions, (and) associations … but rarely are these available to small businesses, and they are never available to cover startup costs, debt and operating expenses.”
The Government does not really lend business owners money, it does provide a guarantee to banks and other financial institution for money lent to small businesses (most of the time thru Department of Trade and Industry like the Small Business Guarantee and Finance Corporation). This loan guarantee mitigates the risk for banks and lenders and makes them more inclined to provide government-backed loans to small business owners who don’t qualify for traditional bank loans since they don’t have track record.
Whatever your capital needs are there are literally hundreds of government financing programs that can benefit your business – from very small loans for start-ups (known as microloans) to export assistance loans, energy efficiency loans, loans for veterans and loans for businesses needing disaster assistance.
In the Philippines there is a scarcity of available government-backed loans, the Government should look into these and increase the government assistance to small businesses. We suggest a One trillion pesos to support small business operations in the Philippines. One problem that business people encounters is you can never get loan if you have a bad credit history.
Loans for people with bad credit is oftentimes the problem in securing loans whether it be small business loan or personal loans. Bad credit history often destroys the name and integrity of the borrower and banks and other financial organization shy away and does not provide loans for people with bad credit history.
With the advent and popularity of applying loans online, unsecured personal and small business loans applications are fairly simple and available to every one, and even granting loans for people with bad credit history. As a trend, they are much simpler and easier to fill out than the paperwork at a traditional bank or other financial lending institution. Client can simply fill out the fields online and once you submit it, the information is electronically retrieved by the lender, and procession takes short period of time compared to banks and other financial institution.


