Businesses and corporations struggling to find sufficient budgets for their projects in the Philippines can rest assured. This country has been well-praised for offering many loans and financial support services – especially from national banks. And BDO Business loan programs proudly stand out, having financed thousands of small and middle-sized companies nationwide.
Are you a newcomer who still feels confused about how they work? Then no worries; we will gladly have your back! Our insightful analysis will break down relevant issues regarding finance loans offered by BDO for the Philippines people. Bring out your notebooks and start jotting down important points to remember!
Table of Contents
BDO Business Loan in The Philippines – Everything You Need to Know
1. Project Finance Loan
BDO Project Finances refer to project financing processes, depending on the consistent flow of project cash as repayment.
Are there any standard, one-size-fits-all rules for all project finance circumstances? The answer is no; every transaction case is unique. Their structures vary across transactions and different industry sectors.
Some notable benefits of project financing for sponsors and investors:
- Improved borrowing capacity
- Risk reduction via a joint venture
- Longer term finance
- Better return
Third parties also enjoy some advantages, including:
- Technology transfer
- 3rd-party due diligence
- Lower project expenses
- Risk transfers
- Extra investments dedicated to public infrastructure
Who will be qualified for this BDO Project Finance program? Appropriate candidates generally include significant production/facility expansions and greenfield projects. Most projects successfully funded by BDO are:
- Natural resources (gas, oil, mining).
- Independent facilities for power generation.
- Public infrastructure (railway systems, shipping ports, airports, and toll-road nets).
To qualify, each project must:
- Have contracts crafted by creditworthy entities for output and major input purchases (such as maintenance, operations, raw materials, and fuels).
- Have appropriate risk allocation to parties capable of managing those risks. The subsequent sensitivity analysis must lead to a sufficient coverage ratio for debt services, ensuring consistent debt servicing during the debt term.
- Have its total cost more or less comparable to other similar projects (and the particular demands of that market).
- Reflect the based pricing of that specific market.
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2. SME Loan
SME Ready Checks are revolving credit lines that provide fund access whenever your companies/corporations need them. They will avail your needed funds by establishing checks against the approved credit lines. After that, the principal payment will revolve as available credit lines.
There are three loan options available:
- Borrowing 3-20M
- A 365-day validity with a renewal option
- Using 70% property values (maximum) to finance business needs.
This program will work best if you:
- Buy supplies or inventory to address bulk or seasonal orders.
- Use working revenues to handle operational requirements.
- Pay suppliers and wait for customer collections simultaneously.
The steps to apply for SME programs are also quite straightforward – terrific for people who hate bothersome transitional stages. Trace along with our guidelines:
Step 1. Check with HR to see whether you and your business are qualified (the criteria include age, income eligibility, and business type.)
Step 2. Prepare all the necessary documents asked by BDO) (in most cases, there will only be collateral and income documents).
Step 3. Submit your requirements and fill in the application form issued by BDO. That’s it. Couldn’t be simpler!
Some extra tools can help you better with your decisions, including the SME calculator (computing loan packages that suit your budgets) or commercial sale properties to obtain all relevant commercial spaces for your businesses.
3. Term Loans
Term loans might be medium (within one to three years) or long (three to five years). Most businesses turn to them for:
- Equipment purchase
- Leasehold progresses
- Plant modernization and expansion
- Plants, factories, or building constructions
Similar to SMEs, there’s nothing complicated regarding the application procedures. You only need to submit:
- Collateral documents (vicinity map, lot plan, tax declaration, and TCT copies for real properties; brochure, purchase orders, and sales contract copies for machinery).
- Bank statements during the most recent six months
- Top suppliers and customers with detailed contact information.
- The most recent General info sheet, By-Laws, Incorporation Articles, and SEC Papers.
4. Working Capital Loans
With this Working Capital program, BDO customers have many options compared to other systems. We will gladly summarize some of the most common ones:
Short-term loans: suited to people with one-time demands for loans. You are expected to pay them within one year.
Credit lines: Applicable for recurring loan needs of several funds lines – aimed at receivables, finance inventory, or other requirements unique to your business cycles. The credit lines will be open for drawing in one year and can get re-availed.
Export finance: Designed for post- and pre-shipment requirements. BDO will help manufacture the cost products or during your wait for the export receipt collections. You must submit LCs (Letters of Credit) or POs (Purchase orders) showcasing your buyers’ orders to BDO for loan availability.
Post-dated checks (PDC) discounting: Once you submit your PDCs and Delivery Receipts, the bank will give you loans that amount to the PDC’s equivalent value. BDO will only charge your interests up to the PDC’s date.
IFTR (Inventory finances with Trust Receipts): These loans are for supplier payments. Applicants only need to submit their supplier invoices and Delivery Receipts; BDO will help them pay the expenses immediately. Purchases for inventory buildups are qualified for these programs.
LCTR (Letters of Credits with a Trust Receipt): Both international and domestic trade transactions can work with LCTR, mostly for supply and raw materials purchases. BDO’s broad coverage of partnered foreign banks ensures your suppliers can be reached anywhere.
- Domestic LCTRs – for suppliers in the Philippines.
- Import LCTRs – for suppliers not outside the Philippines.
This article has detailed everything a Flippinio must know about the BDO Business Loan program. Assess the features and benefits offered by each option to select one best suited to your business and financial budgets. Do not hesitate to write to us if you still get stuck!
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