While the near post-COVID-19 era is an exciting time to start a business, especially in the reawakening foodservice sector, all business owners will always worry about having enough money to keep their enterprise afloat. It’s no secret that running a business is an expensive endeavor, and new businesses in the Philippines often deal with cash crunches involving tens of thousands of pesos several times a year. Growth and profit may seem like distant prospects when one has to account for the costs of rent, equipment, raw materials, maintenance, and employees’ salaries, just to name a few.

One solution that can help an entrepreneur tide their cash crunches over is a low-interest business loan. This type of loan can increase a business owner’s working capital and make it easier to address their short-term cash flow, all while keeping debt at manageable levels. But some business owners may be hesitant about the idea of taking out a loan, or they may not know where to look for a good deal. Both sentiments are quite understandable, as there’s a certain stigma associated with borrowing money and not all low-interest business loans have the most agreeable terms.

As a business owner looking to break through in their industry, where can you look for the most viable low-interest loan options? From the people behind GrabFinance, Grab’s business funding arm for Grab merchant-partners, here’s an overview of the best low-interest business loans—including GrabFinance’s Quick Cash cash advance program.

The Top 5 Business Loan Options for Filipino Entrepreneurs​

It’s a great time to explore low-interest financing options because creditors catering to various businesses from different industries are actively marketing to the new generation of entrepreneurs. You’ll be able to consider offerings from both the private sector and relevant government agencies, with each credit arrangement having unique selling points such as spread-out deductions, easy and straightforward loan application, and quick disbursal of loan funds in addition to low interest rates.

You can count the following solutions among your viable options for a low-interest business financing:

Cash advances from GrabFinance’s Quick Cash program are an excellent option for GrabFood and GrabMart entrepreneurs who’ve been on the platform for at least six months and who are based in Metro Manila. This loan features a pre-approved limit of between PHP 15,000 and PHP 300,000, an interest rate that’s as low as 1.75%, fast and safe loan disbursal through the merchant’s chosen bank account in less than 7 days from the date of application, and repayments via auto-deductions from the merchant’s GrabFood transactions—no post-dated checks or over-the-counter payments needed.

The benefits of getting approved for GrabFinance’s Quick Cash cash advances include the quick application approval for qualified applicants, convenient  disbursals straight to your bank account, and a stress-free repayment scheme that will allow you to worry less about the money you borrowed and focus more on your business operations. All of these are anchored in Grab’s reliable tech ecosystem, which has earned a high level of trust among entrepreneurs in the digital age. 

If you’re a Grab merchant-partner in Metro Manila, you can use the funds from your Quick Cash Loan to hire more people for your company, purchase more products to augment your inventory, upgrade your physical or online assets, invest in marketing and promotion, or finance the opening of new branches. See if you’re eligible for GrabFinance’s Quick Cash loan by visiting this page.

You’re also likely to find favorable low-interest financing options from a local cooperative (coop) or credit union within your industry. Credit unions or co-ops are considered more “old-school” than banks, government agencies, and lending platforms driven by financial technology, and getting a business loan through a coop typically means doing without sophisticated financial tech or financial tools like credit cards.

All the same, coops are a great option because they offer flexible plans on top of low interest rates, and they’re administered by industry professionals who know your needs. You can apply for a business loan at a cooperative by finding one based in your locality, filling out a membership application form, and paying a membership fee. On top of the low interest rate and the simplicity of the loan arrangement, you’re likely to enjoy additional perks like discount rates on industry products as well as the sense of community that a coop membership will offer you.

An interesting alternative to the traditional credit union is peer-to-peer or P2P lending. Entrepreneurs have a chance to connect with individual creditors or investors on a P2P lending platform and borrow money at low interest. Many of these loan arrangements are unsecured, which means that you won’t be required to put up collateral to get approved for financing. Plus, the longer you stay on a P2P lending platform and the more good credit you build, the more opportunities you have to get financing at even lower interest rates.

If you don’t mind joining a new digital platform to look for financial support for your business, you can try your luck on a P2P lending network. Ask other entrepreneurs about where they’ve been able to secure funds from P2P lending, or do your own research about which P2P lending networks are available to you. Just be aware of the risks that you can encounter when securing business financing through a P2P lending platform, like the fact that you’ll enjoy fewer borrower’s protections compared to those that you can expect at a bank.

It’s also an option to apply for a business loan with a bank based in your area. Banks remain among the most trustworthy lenders because of their reliable business model and the accessibility of their branches, although their interest rates may not be as low as the other choices listed here.

Your best prospects for a low-interest business loan may lie with a rural bank, as these financial institutions cater to microbusiness and SME owners who have yet to break out in their respective industries. Scout out the low-interest business loan options offered by a nearby rural bank and see if your business fits the terms for eligibility.

Lastly, some Philippine government agencies are also reliable creditors for low-interest business loans, and their loan programs are specially tailored to meet the needs of their constituents. One example is that of the Overseas Workers Welfare Administration’s (OWWA) business loan program for overseas Filipino workers (OFW) who want to get repatriated and make a living back in the Philippines.

Check out your options among the various agencies and compare the interest rates as well as the particulars of repayment. You may be able to find a business loan option with affordable interest rates, and the terms may be a good fit for your business goals.

What to Remember When Applying for a Low-Interest Business Loan​

As you can glean from the items above, you have several viable options for low-interest business loans. The right arrangement can strengthen your business, make it even more efficient, and help you clear your goals in terms of sales and revenue—all while keeping your business debt as manageable as possible.   

Regardless of which low-interest business loan option you choose, don’t forget to do the following:

• Determine what aspects of your business you will be funding when you take out your loan, whether they have to do with rent, salaries, inventory, marketing, or expansion. You’ll be able to get the most out of your financing if you know exactly what to use it for and if you are disciplined with your approach to spending the money that you’ve borrowed.
• Find out what documentary requirements you have to prepare for your business loan application and where you should submit them. Though many lending institutions have made an effort to streamline their application processes and make them faster and easier, expect to put in a little legwork when collecting and putting together your documents.
• Choose a method for repaying your loan or cash advance, either over the counter or online. Several of these options will allow you to repay the interest from your bank account, while GrabFinance’s Quick Cash offers the added convenience of auto-deducting repayments from Grab merchant-partners’ transactions.
• Calendar your loan payment deadlines and be conscientious about paying your debt back on time. Low-interest loans will make your debt more manageable, but you may end up getting more stressed about borrowing money from an institution if you fall behind on your repayments and get saddled with penalties.

Grow Your Business with Financial Solutions from Grab

As long as you commit to being organized and responsible about your business finances, you shouldn’t be afraid to take out a business loan or cash advance. A low-interest arrangement with favorable terms will help you address your business’s growing needs and allow you to practice financial responsibility, thus preparing your company for an even more prosperous future.  

Grab merchants have awesome business prospects ahead of them thanks to opportunities like GrabFinance’s Quick Cash program. Be an active participant in Grab’s merchant community and grow your business through GrabFinance!