Five Effective Ways To Finance Your New Business

If you are going to ask some people if how will they make themselves rich someday, you will hear a lot of them would say that they would like to have their own businesses. They have realized that there's a better chance to a better life someday if they would pursue to have their own business than to climb the corporate ladder. The stories of people who are made from rags-to-riches also inspires them to make their ideas turn into reality and hope that someday, it will make a good fortune out of it. We hear stories of Manny Pangilinan, Henry Sy and John Gokongwei to name a few who are one of the richest people in the planet. They have one thing in common - they made fortune from their businesses.

To start a business, you need to create a plan. And part of this plan is the capital that you will use in starting it. Truth is, most people are discouraged to start their business until they manage to acquire the finance that they needed on their own. However, there are several ways on how to get that capital so you can start your own business in the Philippines.

How To Finance A Business in the Philippines

1. Your own savings.

First, ask yourself, do you have enough savings to start up your business? If yes, then there's no reason to ask some other people or try a bank loan if your own savings can fuel up your business. One of its advantage is that it is the easiest to access and it has the lowest interest rates to pay - zero. On the other hand, the amount you can get from self-financing is the least as compared to other financing options.

2. Friends and Family.

If your own savings is not enough for the capital of your business, the why not ask your family or even your friends to give you some funding. There's a saying that 'two heads are better than one'. I suggest you go first to your mother or father, then your working sisters and brothers and last is your closest friends.

3. Bank loans.

If you are just starting your business, I suggest you make bank loans the last option. You will have a hard time in getting money from the banks since the risks involved is very high. Since your business has no proven records of earning sales, you have no proof of income (at least yet). But, bank loans are ideal for business who are in 'expanding' stages. Banks and companies who are offering loans will be very happy to give you the amount given that you have proofs that you will be able to return it back - of course with an interest.

4. Cooperatives.

If you are a member of a cooperative, chances are your cooperative are offering business loans too. One advantage of a cooperative loan is the lower interest rates compared to banks since you are a member of the cooperative. Aside from applying for a loan, you might as well ask directly from your co-members.

5. Venture Capital.

Last but not the most exciting way of financing your new business is through venture capitalists or VCs. Venture capitalists are organizations that look for potential money makers in terms of services or products. In short, their business is to make profit out of investing in start ups. Some of the venture capitalists in the Philippines are Narra Venture Capital (, Philippine Venture Capital Investment Group (, Globe Incubator and even Manny Pangilinan through IdeaSpace.

Now that you have found where you will get your business capital, the next thing to do is to protect it and do your best to grow it and be able to pay your financiers. If you have additional way to finance a new business, please do not hesitate to post on the comment section below. Good luck to your brand new business!

Mark Hugh Neri

Looking for financial planning workshop or for life and/or health insurance with investment options? Got questions related to personal finance? Feel free to message me at Money Gizmo (see link below)

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