Getting extra capital helps a company grow its operations. A Business Loan in the Philippines helps many small owners reach their goals. You need to prepare specific papers before you talk to a bank. This article lists the five items lenders look for during the application.

Each bank has its own set of rules for borrowers. Most lenders in the country ask for the same basic documents. Having these files ready saves a lot of time for everyone. You can avoid delays by organizing your folders early in the process.

SEC or DTI Registration Documents

Legal registration is the first thing a lender checks. The Business Loan in the Philippines application starts with your official government certificates. For a single person, you need a Department of Trade and Industry certificate. Corporations must provide papers from the Securities and Exchange Commission.

These papers show that your business name is unique and legal. They list the names of the people who own the firm. The bank uses this to see who is responsible for the debt. You must keep these records current and accurate for the bank.

Lenders look for a history of legal operation in these files. A business that is two years old usually has a better chance. They check the date on your certificate to verify your business age. Without these papers, a bank cannot process your request for money.

Valid Government Identification

Banks must know exactly who is asking for a loan. A Business Loan in the Philippines requires the owner to show two valid IDs. These cards must come from a government office or a state agency. You can use a passport, a driver’s license, or a postal ID.

The names on the IDs must match the names on the business papers. Banks check the photos to confirm your identity at the branch. This step helps the bank avoid fraud and fake applications. You should provide clear photocopies of the front and back of each card.

Make sure your identification cards are not past their expiry date. Lenders reject documents that are no longer valid under the law. You might need to show the original cards during your bank interview. This part of the process is quick if your IDs are ready.

Audited Financial Statements

Your money history tells the bank if you can pay them back. A Business Loan in the Philippines involves a review of your financial statements. These reports show how much money comes in and goes out. They list your assets like equipment and your debts like other loans.

An external accountant must sign these reports to make them official. This person checks if your math is correct and honest. The bank looks at these files to see your yearly profit margins. They want to know if your business makes enough to cover interest.

Most banks ask for the last two or three years of records. They look for a steady trend of growth in your company’s income. If your business is losing money, the bank might say no. Keeping good books is a major part of running a successful firm.

Income Tax Returns

Tax papers are another way to prove your business income. A Business Loan in the Philippines requires your Income Tax Returns or ITR. These documents must have a stamp from the Bureau of Internal Revenue. The stamp proves you filed your taxes on time and paid the fees.

The bank compares your tax filings with your internal financial reports. They look for the same numbers in both sets of documents. If the numbers match, the bank trusts your financial data more. This shows you are a professional owner who follows government rules.

You should keep copies of your ITR for at least three years. Lenders use these to calculate your average monthly and yearly earnings. High earnings on your tax forms lead to higher loan amounts. This is why paying the correct taxes helps your future credit.

Business Permit and Mayor’s Permit

Every business needs a local permit to stay open for customers. A Business Loan in the Philippines requires a valid Mayor’s Permit from your city. This document shows your shop or office follows local safety and health laws. It proves you have the right to do business in that area.

The bank might send a person to visit your physical location. They want to see that your business is active and not just on paper. A valid permit is a sign that your business is stable. You must renew this permit every year to stay in good standing.

Lenders also look for a Barangay Clearance along with the Mayor’s Permit. These local documents confirm your business location is correct and real. Having all local permits ready shows you are ready for a bank’s review. It builds confidence in your ability to manage a company well.

Bank Statements for the Last Six Months

Lenders check your bank account to see your daily cash flow. A Business Loan in the Philippines usually requires six months of bank statements. These pages show the bank how often you receive payments from clients. They also show how often you pay your suppliers and staff.

A healthy bank account has many deposits and few bounced checks. The bank looks for a balance that can cover a monthly loan payment. If you have a lot of money sitting in the bank, it helps. This proves you have extra cash for any unexpected business costs.

You should use a separate bank account for your business and personal life. Mixing your money makes it hard for the bank to see your profit. Clear bank statements make the credit officer’s job much easier and faster. This leads to a quicker decision on your loan request.

Proof of Collateral if Required

Some loans require you to pledge an asset as a guarantee. A Business Loan in the Philippines might ask for a land title or a car. This is called collateral, and it protects the bank if you cannot pay. The bank will check the value of the property you offer.

You must provide a copy of the title or the registration papers. These documents must be under your name or the name of the business. The bank will check if there are other debts on the property. Clean titles make the collateral process go much smoother for everyone.

Not all business loans require you to give up an asset. Some loans are based only on your income and your credit score. However, having collateral can help you get a lower interest rate. It gives the bank more security when they lend you a large sum.

Key Takeaway

Organizing your documents is the best way to get a loan approved. Obtaining a Business Loan in the Philippines is easier when you follow the bank’s list. This preparation shows you are a serious leader who values time and rules.