In mainstream Filipino culture, loans are sometimes seen in a negative light. However, in the right context, a business loan can actually be necessary to ensure future growth and profitability.
Unfortunately, novice entrepreneurs may make some errors in judgment when they take out loans for businesses. In this quick guide, we’ll lay out some of the more common business loan mistakes business owners make so that you can avoid them yourself when the time comes.
1) Not Choosing the Right Loan Provider
When providing a business loan, Philippines’ small- and medium-sized enterprise (SME) lenders typically examine a borrower’s risk profile before proposing terms. You’ll have a better shot at a good deal if you choose a provider that specializes in businesses of your type and industry.A lender that closely matches your business’s needs should be more familiar with your risk profile, which means that you should be able to secure a safer, better-quality loan from them.
The Maya Flexi Loan is a no-collateral product from Maya that ensures accurate risk assessments and better loans for qualified borrowers. Maya Flexi Loan is exclusively available to Maya Business Manager users and it uses data from the platform to quickly provide loans of up to PHP 2 million in value. Its fast approval process and easy payments have made it a favorite business banking loan option for SMEs and major corporations alike.
2) Not Creating a Realistic Business Plan
Many providers of business banking loans require borrowers to offer a detailed proposal outlining how the loan amount will be spent and how it will be paid back. This business plan should include projections supported by data as well as detailed analyses that support the need for a loan of the requested size.
A lot of business owners might attempt to fudge the offered figures to make them seem like a better bet for lenders, but this is not a good idea. Established loan providers that offer high-quality loans are usually quite adept at spotting issues in loan proposals, especially if the business applying for the loan is within their specialization. In most cases, limiting your request and business plan to something more realistic and negotiating later is a better strategy, especially if your business has not taken on many loans in the past.
3) Not Preparing a Solid Pitch
Aside from a business plan, many lenders will also require an in-person presentation as a precondition for a business loan, particularly when large amounts are involved. If this is the case for the loan you’re requesting, you must spend time developing and refining your pitch, making sure that you have answers ready for any possible question the lender might have.
4) Failing to Provide Sufficient Documentation
Missing or inaccurate documents will not only sink your odds of securing the loan you’re going for today but it can also hamper your attempts to get other funding in the future. Try to show responsible business stewardship by providing all the documents requested by the lender and taking the time to ensure that everything is in order.
5) Sending Out Too Many Applications at Once
Basic logic seems to say that more applications mean better chances of securing a loan. However, in the Philippines, doing so might cause concern within the country’s close-knit network of loan providers, potentially barring you from any kind of quality financing. In most cases, the best approach is to send just a few applications to providers with loan products designed for your specific business needs.
6) Accepting the First Offer
Being able to secure a good loan offer is already an achievement in itself. However, in many cases, you can probably do better. If you’re taking a more traditional style of loan, you might be able to get better terms simply by talking things over with your loan officer. While you won’t always be able to get concessions, it would be a mistake to not take the opportunity to negotiate when it presents itself.
7) Over-Exuberance
Taking out a serious business loan can be an emotional experience. And the stronger the emotions involved, the greater the odds of developing blind spots that keep you from seeing your own mistakes. While it’s good to maintain a positive attitude, you should do your best to temper your expectations, especially when business loans are involved.
Maya Flexi Loan Takes the Guesswork Out of Business Loans
Maya Flexi Loan gives your growing business safe funding to help it grow or meet immediate operational challenges. Create your Maya Business Manager account for quick loan applications, low interest rates, and automated loan payments.
Once you’re on Maya Business Manager, you’ll also have access to the Maya 1-2-3 Grow bundle. Maya 1-2-3 Grow lets you enjoy a 1% MDR (merchant discount rate) discount on all QR Ph transactions, 3 months after you sign up. This means an extra PHP 14,600 in transaction savings for your business for every PHP 1 million in QR Ph sales, speeding up your business’s growth and resilience.
The Maya 1-2-3 Grow product bundle also lets you use a Maya Business Deposit account for your settlements. With an incredible 2.5% per annum interest rate, your business’s funds will grow by PHP 25,000 each year on just a PHP 1 million deposit. You’ll also save even more money thanks to Maya Business Deposit’s zero maintaining balance and free transfers via InstaPay and PesoNet.
Signing up also qualifies you for a Maya Flexi Loan offer of up to PHP 2 million in just 3 months. For a better offer, use Maya as your primary processor for all your business’s payment card and digital wallet payments. The more you use Maya, the better your loan offer will be.
Send in your Maya Business Manager application today to enjoy the Maya 1-2-3 Grow bundle and to secure your first Maya Flexi Loan.
