While it may be some time before the wider public understands the value of a quality business loan, Philippines-based small businesses are now taking out loans in record numbers. Empowered entrepreneurs today are now better able to identify legitimate and safe business loan offers, and they are more easily able to apply for such loans than they were in the past.
Historically, bank loans—the gold standard for business loans—were often only accessible to larger, more established businesses, leaving smaller ones to resort to high-risk funding sources. Now, a new generation of digital banks or neobanks is giving small businesses a leg up by offering uncomplicated but safe business banking loans with products like Maya Flexi Loan.
Regardless, despite improved access to safe financing, many entrepreneurs remain hesitant to apply for a business banking loan. Loans tend to be viewed as a negative, even when they’re sometimes the only option to take a business forward. In practice, there are many legitimate reasons for taking on business debts. Understanding these motivations can shed light on which business operations tend to need serious cash injections. Let’s delve into the motives that cause business owners to take out loans.
1. Provide Initial Capital
If you want to take advantage of a market opportunity but don’t have a lot of cash on hand, business loans can provide you with the starting capital to cover your initial expenses. Efforts like product development, personnel hiring, marketing and advertising and equipment or infrastructure setup can cost a lot of money, and taking on a loan might be the only way you could get started on these opprtunities.
2. Purchase Critical Equipment
Equipment costs can be a serious barrier to entry in many industries. A loan can sometimes be the only way you can overcome this barrier, particularly in manufacturing and other similarly equipment-dependent businesses.
3. Acquire Inventory
Loans are also commonly used to acquire inventory for production and resale. This use of loans for this purpose is common enough that there are business loan products available specifically for inventory financing, including some secured by your inventory purchases and others pegged to the face value of your invoices.
4. Business Expansion
When your business is ready to grow, a loan can provide the funds it needs to capture new opportunities. Whether it’s opening additional locations, entering new markets, or diversifying your product or service offerings, the extra liquidity offered by a loan can give you much-needed capabilities as well as invaluable momentum.
5. Build Credit
While you may not need a loan right now, you may want to apply for one in the future. The early, responsible borrowing and timely repayment of business loans can help establish your business credit profile, paving the way for more favorable financing opportunities later on.
6. Facilitate Product R&D
Some industries like tech and fashion require near-constant innovation. If you’re lagging behind your competitors, loans can fund the development of new products, technologies, or processes that will allow your business to stay relevant or maintain its competitive edge.
7. Ramp Up Marketing
Loans can be used to fund continuing marketing and advertising campaigns to enhance your brand visibility. Paid ads can be especially important if your business is new and has yet to develop a market presence.
8. Cover Emergencies
Emergencies can sometimes happen before you’ve had the chance to build a sufficient cash reserve. In these cases, loans may be the only way to get the funds you need to solve urgent needs such as equipment repairs, payroll issues, or cash shortages.
Grab Any Opportunity with Maya Flexi Loan
Taking out a Maya Flexi Loan gives you a safe, localized solution for instant funding in a booming Philippine market. With Maya Flexi Loan, you can always access the perfect level of liquidity to meet any emerging opportunity or challenge to your small business. To apply for your first Maya Flexi Loan, create your Maya Business account today.
Getting a Maya Business account immediately qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months, perfect for covering all the contingencies your business might face. Simply keep using Maya Business as your primary processor for all wallet and card payments to keep improving your subsequent loan offers.
Setting up a Maya Business account also immediately entitles you to a high-performance Maya Deposit account for payment settlements and for receiving Maya Flexi Loan funds. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on a PHP 1 million deposit. Even better, you’ll be able to send money to your partners and suppliers for free via InstaPay and PESONet, saving you cash on every transfer.
Sign up for Maya Business today to take advantage of these exclusive benefits and to access industry-leading Maya Business solutions.
