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In 2020, more people than ever are choosing to start their own businesses. The alternative to the daily commute and the freedom that comes with being your own boss holds a massive appeal for people across the Philippines and around the world. For most people, starting your own business requires at least a small amount of capital to cover basic expenses and set up costs. This is Asteria’s guide on how to use personal loans for small businesses in the Philippines.


Unless you plan to work from home, you will need to pay for the cost of premises. Rates can vary depending on which part of the Philippines you are located, but generally speaking, rents and sale prices are far cheaper, the other out of the city centre you go. Using a portion of your loan to pay for the first few months’ rent for your new premises is a good idea as it means you won’t have to worry about covering those costs while you get yourself established.


Digital businesses will need to pay for routers, laptops, smartphones and software, whereas physical businesses such as restaurants and repair services will need to cover the cost of tools and other equipment. Ensure you make a thorough and fully costed list of all equipment you think you will need before you open your business. It also makes sense to invest in spares and backups. Though this may seem like a large outlay at the time, it makes more sense than losing trade because of broken or unusable tools.


Staff costs are often one of the most important considerations of any business and whether you employ one person or ten, you will need to factor in a certain amount of your personal loan to cover at least the first month’s wages when you are first getting set up. Also account for things like uniforms, interview expenses and other miscellaneous costs.


Depending on the nature of your business, you may need to pay for an outside training provider to keep your staff up to speed with industry developments and information. Basic customer service instruction, health and safety training or some time developing detailed product knowledge can be an invaluable investment, so always consider using some of your loan to cover training expenses. Certified training providers can usually provide hard copies of any qualifications you or your staff have completed. This can be something of an investment as it demonstrates competence to your customers and can help to establish a professional reputation in the marketplace.

Branding and Marketing

Personal loans for businesses in the Philippines should always include a substantial allowance for branding and marketing. Even street food traders and those who primarily deal with physical customers will need to be mindful of things like signage, logos and packaging. Allocating enough to cover the basics is always recommended, though digital businesses may want to invest a little more. Online marketing can be costly, especially in saturated or particularly competitive areas, so allocating enough of your loan to pay for professional web development services is generally a good option.

Logistics and Shipping

Ideally, your first few months sales will cover the costs of your logistics and shipping, but you will need to ensure you have access to funds to cover costs before you start making a profit. Using some of your personal loan to pay for postage costs, haulage and packaging is a good idea if you want to hit the ground running, without having to borrow more or create delays for your customers.


For mobile traders, delivery services or tour guides, transport can be the backbone of the business, meaning that it should be considered as one of the most important priorities when it comes to portioning up your personal loan. Repairs, fuel costs, tax and insurance should also be factored in as part of the overall costs. For digital businesses in the Philippines, this may not be as much of an issue, but for those who are selling or transporting a physical product, it will be an essential.


Whether you need to pay for virus protection, real time threat detection online or a security camera system for a warehouse, this is something that can be never be overlooked, even in the early stages of your business. In the Philippines, crime is generally much lower than it is in the U.S.A or Europe, however, break ins, cyber-attacks and other illegal activity does happen. Using a personal business loan to cover your security costs is just common sense. Though this can feel expensive, it is far cheaper than trying to recover your losses after trying to cut corners to save money.


For food traders, textile and clothing retailers or tourist focused manufacturers, stock is an essential cost that will need to be covered by a personal loan, well before you start trading. Ear mark enough of your loan amount to cover at least 2 months stock, though ideally more if you can afford to. Though you will need to estimate carefully, buying a little more than you think you will initially need is usually a good idea, providing you don’t stand to lose any money due to things like expiration dates or spoilage.


Starting a business in the Philippines takes preparation, research and enough capital to cover your initial costs. Taking out a personal loan is one of the most common ways most small business owners finance themselves. Detailed, properly costed lists that account for every element of the business are essential if you are going to use the full amount of your loan effectively. Before approaching a lender, always ensure that you know exactly how much you need to borrow and that you are confident you can comfortably afford any repayments you agree to. Shopping around to find the best interest rates is always advisable and depending on your credit rating and the size of your business venture, you may also be able to negotiate with the lenders in person.

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