Many micro, small, and medium enterprise (MSME) owners know that finding enough funds can be a challenge when running a business. When starting out, cash flow may still be unsteady. Even as it becomes more established, saving enough to upgrade equipment or support expansion can take time. Instead of putting too much pressure on available cash or waiting years to save, a small business loan can provide the funds needed to move forward.
Fortunately, reputable financial institutions like Maya offer various micro, small, and medium-sized enterprise (MSME) financing solutions, from micro business loan products to longer-term loans, to suit different business needs. By exploring your options and reviewing the business loan requirements, you can find a credit option that fits your situation. Of course, getting the funding is only the first step. It's just as important to use your loan wisely. With proper use of a startup business loan, Philippines’ entrepreneurs can put the funds toward meaningful business growth.
With that in mind, here are some practical tips for using your MSME or SME loan wisely and making the most of the funds you've borrowed.
1. Borrow for a Specific Business Purpose
Before taking out an SME or MSME loan, identify exactly what you need the funds for. This could mean restocking products, buying ingredients or materials, upgrading equipment, or covering another expense that supports your operations. Having a clear purpose can help you determine how much to borrow and ensure the money goes toward something your business genuinely needs.
When looking for a loan for business use, it’s also important to choose a lender with financing options for different stages of your venture. Signing up for Maya Business, for instance, lets you build eligibility for a range of loan options, and you only need 1 valid ID to get started. Among the options Maya Micro Flexi Loan, a no-collateral loan that provides up to PHP 350,000, payable up to 90 days. There's no upfront admin fee upon borrowing, just a service fee of at least 5% and the standard Documentary Stamp Tax. This amount could help cover the initial inventory costs of a sari-sari store or an online selling business. Meanwhile, for bigger needs such as opening a physical branch or purchasing multiple pieces of equipment, the Maya SME Flexi Loan lets you borrow up to PHP 2 million, payable for up to 12 months. By identifying your specific need first, you can choose financing that better fits your venture.
2. Prioritize Expenses That Can Help You Earn
Once you know what you need, you should next prioritize expenses that can help generate income or improve efficiency. A food seller could purchase equipment that allows them to prepare more orders, while a craft seller could buy materials in larger quantities to fulfill more requests. The goal is to focus on expenses that have a clear connection to the business and its ability to grow.
You can also look for ways to use your business resources to create additional income. If you run a sari-sari store, for instance, you can offer mobile load, bills payment, and e-wallet cash-in and cash-out services through Maya Business. These services can attract more customers while giving you opportunities to earn from additional transactions. Taking advantage of complementary services like these can help you make better use of your existing business setup and create additional revenue opportunities.
3. Compare Your Options Before Spending
Before making a purchase, take time to compare your options and determine which choice best fits your business needs. Check prices from different suppliers, consider the quality and durability of equipment or materials, and look at whether buying in larger quantities could offer better value. You don't necessarily need to choose the cheapest option, but you should make sure the purchase is worth the amount you're spending.
It can also be helpful to consider how each purchase fits into your current budget and business priorities. By comparing options before spending funds from a business loan, Philippines’ business owners can make more deliberate spending decisions and get better value from their borrowed funds.
4. Account for Repayment as Early as Possible
It’s never too early to start planning for repayment. Start by reviewing your usual sales and expenses to determine how much you can reasonably set aside for payments. From there, base your repayment plan on typical cash flow rather than your best sales periods, so you're better prepared even if business slows down. This can help ensure that the loan remains manageable alongside your other business expenses.
Additionally, it can be helpful to choose financing that makes repayments convenient. After taking out a Maya small business loan, Philippines’ borrowers can use the Maya Business app to settle their payments in just a few taps. This eliminates the need to visit a payment center or bank branch, making it easier to stay on top of loan obligations. Having a convenient way to make payments can help you manage your repayments more consistently.
5. Separate Business and Personal Spending
For small businesses, especially those operated from home, it can be easy to mix personal and business expenses. Keeping these finances separate gives you a clearer picture of your business finances and helps ensure that borrowed funds are used for business purposes.
With the Maya Micro Flexi Loan, the borrowed funds are credited directly to your Maya Business Deposit account, keeping them separate from your personal money from the outset even as they earn 4% p.a. interest. This way, you can maintain a clear boundary between your business and personal finances and keep the loan dedicated to your venture.
6. Keep Track of What You Spend
Keeping track of your spending can help you make sure your loan is being used as intended. You don't need complicated accounting tools either. A simple spreadsheet or budgeting app can help you record purchases, see how much you've spent, and track how much of the loan remains. For example, if you take out a sari-sari store loan to restock your store, recording each purchase can help you see how the funds are allocated across your inventory needs.
Fortunately, if you’re a Maya Micro Flexi Loan borrower, it’s easy to monitor your business expenses through the Maya Business app. This gives you a clearer view of your business finances and allows you to make adjustments when needed. Reviewing your transactions regularly can help you stay aware of your spending and make more informed decisions about how to use the remaining funds.
Make the Most of Your Business Loan
Taking out an MSME or SME loan can give your venture the funds it needs to cover important expenses and pursue growth opportunities, but using those funds wisely is key. By following the tips above, you can put the financing to good use without putting unnecessary strain on your finances. When managed responsibly, a business loan can be a practical tool for building a stronger and more sustainable venture.
Download the Maya Business app today—now available on Google Play and the Apple App Store.
