Many business founders find excitement and meaning in transforming ideas into reality. But if you’ve ever tried to launch a startup or to get a small- or medium-sized enterprise (SME) off the ground yourself, you’ll know that doing this can be an expensive endeavor. If you’re serious about building a startup or SME, you’ll need to get your funding in order.
Luckily, the Philippine financial landscape of today offers a variety of funding sources tailored to the needs of locally based ventures. Let’s look at some of the funding options that you can use so that your venture can hit the ground running.:
1) Digital Banks
In the post-pandemic era, fintechs companies, neobanks, or digital banks have emerged as a preferred source of loans for businesses with limited resources. In the Philippines, digital finance pioneer Maya has created a buzz in the SME and startup business loan market with its innovative and advantageous Maya Flexi Loan offering. Maya Flexi Loan is a no-collateral loan product that’s exclusively available to Maya Business Manager account holders. It features fast approval times, instant fund access through Maya Business Deposit, as well as low fees and interest rates, making it the ideal business banking loan for dynamic, digitally reliant SMEs and startups.
2) Traditional Commercial Banks
Established financial institutions have been a reliable source of business banking loans for decades. Though these banks offer safer sources of funding, their application processes are generally much slower than those of newer digital banks. Additionally, most traditional banks will require extensive documentation as well as collateral, making them less accessible for many entrepreneurs in the SME and startup scenes and more suited for bigger and more traditional businesses.
3) Government Financial Institutions
Over the years, the Philippine government has established several financial institutions to support SMEs and startups. Entities like the Small Business Corporation (SB Corp) and the Development Bank of the Philippines (DBP) offer financial assistance programs to promote entrepreneurship and business growth. Additionally, various other government agencies offer grants and subsidies to promote specific industries, innovation, and development. Depending on your business's nature and objectives, you may be eligible to receive financial support through these avenues.
4) Microfinance Institutions
Microfinance institutions are geared toward providing small-scale financial services to microbusinesses that might not qualify for loans from traditional banks, offering very small loans with manageable interest rates. These institutions are not usually set up to help SMEs and startups, as these business types are substantially larger than typical microbusinesses. However, some microfinance institutions may be able to provide your business with loans large enough to cover operational shortfalls, making them worth looking into.
5) Venture Capital Firms
Venture capital (VC) firms are investment companies that provide funding to startups and SMEs in exchange for equity ownership. These firms not only offer financial assistance but also provide valuable business guidance and networking opportunities to help businesses thrive. However, not all VC firms are the same, and you’ll need to vet your options well to ensure that the ones you go with are aligned with your values and long-term business goals.
6) Angel Investors
Angel investors are high-net-worth individuals who invest their personal funds in promising startups and SMEs. These investors can offer funding in various ways, including through loans and donations, or by acquiring equity in your venture. If you have an unproven concept, support from these investors may be one of the most realistic paths for gaining early-stage capital, as traditional banks, government institutions, microfinanciers, and VC firms all tend to favor businesses that offer minimal risk exposure.
7) Crowdfunding
Crowdfunding has emerged as a popular alternative to traditional financing in recent years.Through public events or online crowdfunding platforms, you can present your business ideas to the public, and interested individuals can donate funds to support the venture. This method not only generates capital but also validates the product or service idea. Importantly, while it is common practice to give gifts to crowdfunding donors, funds raised through crowdfunding do not have to be paid back, reducing your venture’s financial risks.
8) Peer-to-Peer (P2P) Lending
P2P lending is similar to crowdsourcing except that funds are given as loans rather than donations. The main appeal of P2P lending is that it cuts out traditional financial intermediaries, reducing the cost to secure loans. As with other funding sources, SMEs and startups can get loans through these platforms by showcasing their business plans and creditworthiness, making it an accessible funding option.
9) Business Incubators and Accelerators
Business incubators and accelerators support early-stage startups by providing funding, mentorship, and shared resources. In addition to financial assistance, these programs may offer access to office space, equipment, as well as valuable networking opportunities. If you’re interested in gaining funding and connections with industry thought leaders, these programs are well worth considering.
Maya Flexi Loan: Business Financing with a Twist
When securing funding or business loan, Philippines-based SMEs and startups have several options at their disposal. That being said, if you’re looking for a convenient source of funding, Maya Flexi Loan is a safe choice that’s also easy to secure. To apply for a Flexi Loan, simply create a Maya Business Manager account and use Maya’s payment and business finance solutions. Frequently using Maya products to facilitate payments entitles you to a Flexi Loan offer of up to PHP 2 million to cover your business’s needs.
Once you’ve created a Maya Business Manager profile, don’t forget to join Maya’s exclusive 1-2-3 Grow bundle. 1-2-3 Grow accelerates your startup or SME’s growth by giving you a 1% merchant discount rate (MDR) on all QR Ph sales, 3 months from promo onboarding. Joining 1-2-3 Grow can also help you save up to PHP 14,600 for every PHP 1 million in sales at an MDR of 1.54%, effortlessly boosting your savings. Sign up for a Maya Business Manager account today to enjoy unlimited funding possibilities for your business.
