The cash needed in starting and running your new business can be collected in many ways.
Of course, first on the list is money coming from your own savings. You may have been saving for years. It can also come from things you’ve sold like car, lot, jewelries or other important properties. Maybe you have a stock certificate or government bond you can exchange for cash.
Using your own money may be the easiest way to fund your capital. You can also borrow capital from relatives and friends. Unlike banks, it’s a lot easier to borrow from them, sometimes with even no interest! Therefore it’s just proper to pay them.
But sometimes, your own savings and borrowed money from relatives and friends is not enough to start. If that happens, you need to find other ways to raise capital.
Banks helping small and medium enterprises
There are many banks helping out on small businesses. But there are also banks more willing to help than others even though they know there are more problems when it comes to lending to SMEs.
In the November 2000 issue of Entrepreneur Philippines magazine, there are certain banks recognized “best for small business” or “friends” of small businesses. These are Development Bank of the Philippines, Land Bank of the Philippines, Planters Development Bank and Metropolitan Bank and Trust Company.
Other government agencies that have unique lending programs for SMEs are Department of Science and Technology and Technology Resource Center. They have credit programs for SMEs that want to buy and use new technology. There’s also the Philippine National Bank that implements “Pangkabuhayan Loan Program” and the Small Business Guarantee and Finance Corporation that has a loan program for SMEs, other than giving loan guarantee so that small businesses could borrow even without collateral.