Protected,

“We are able to expand the ability of a small and even a micro business to access formal lending, which is hard to do for them.”

“As a bank, we also educate small business owners or negosyantes on how they can fully manage their financial data through digitization of their accounting, collections, and so on, which later on builds a ‘digital footprint’ for them that is used in alternative credit,” Mr. Soliman said.

Moreover, for small businesses who do not meet most banks’ criteria, Mr. Soliman said that there are platforms such as SeekCap, a hub of financial institutions in the Philippines where borrowers can register to gain access for easier search on various institutions where businesses can meet its criteria.

Despite the innovation of technology to make lending easier for small businesses, predatory lenders also adapted online to scam business owners.

For businesses that have been scammed already, Mr. Soliman said that rebuilding your business can help you in applying to legal lenders. With alternative data, UnionBank will use data points of the business, its operations, collections, and financial behavior to assess whether a business can be granted a loan.

“Businesses who might not be able to meet some of the alternative criteria would have an option to provide additional security to their loan such as real estate,” Mr. Soliman added.

The DTI-ROG recommended MSMEs to apply for loans via Small Business Corp. (SB Corp.) through its RISE UP Micro Multipurpose Loan where microenterprises can borrow up to P300,000 payable monthly up to three years.

Loans through the SB Corp. only have four requirements, namely: a government-issued ID, photos and videos of business operations and assets, corporate documents (if applicable), and barangay certificate (for P100,000 and below loans)/BMBE certificate or Mayor’s permit (for above P100,000 loans).

With inflation rising this year affecting goods and services, businesses also bear the brunt of the effects to adjust their prices that can accommodate both their business’ needs, as well as keeping it low to avoid passing the expense to their customers.

Ms. Dela said that because her business is a franchise, she has no say on price movements of LPG products. Her option is to text blast her customers on price changes prior the implementation to let them know ahead if the LPG price increases or decreases, helping her customers decide when to order.

TIPS FOR A WISER

NEGOSYANTE

Mr. Soliman said to watch out for “too-good-tobe-true” programs, and as a negosyante, doing research on various lending offers or finding a fellow experienced negosyante or business communities to provide feedback and guidance, can help to make sure businesses won’t be tricked.

He also noted that UnionBank provides platforms for community building such as the UnionBank Globallinker.

“This platform allows you to connect with more than 80,000 MSMEs in the Philippines, and even access more than 500,000 MSMEs around the world. We also provide access to MSME support such as educational webinars and trainings, technology service providers, and even other financial lenders who are all part of a larger community,” he said.

The central bank advised negosyantes to ensure that they are borrowing or transacting with licensed financial service providers.

“It is also important for MSMEs to fully understand the terms and conditions of their loan contracts, their responsibilities as borrowers, and the consequences of defaulting on a loan contract. MSMEs are encouraged to ensure that they have the capacity to pay their obligations within the terms of their loan contracts,” the BSP said.

The DTI-ROG added that small businesses can also coordinate with their local Negosyo Centers or the Negosyo Center Online Portal to keep track on trainings, marketing opportunities, and other business development services available within their location.

“The DTI invests in developing MSMEs by allocating funding for programs such as the ‘One Town, One Product’ to provide product development assistance, or ‘Kapatid Mentor Me’ to provide mentorship modules. Participation of MSMEs to these programs are fully subsidized by DTI,” it said.

“We also advise small businesses to leverage digitalization to enhance their business operations (e.g., digitized bookkeeping, automated Point of Sale, etc.) or expand their consumer base (e.g., online marketing, last mile delivery services, etc.),” it added.