LOAN GOT DENIED AGAIN?

LET'S GET THAT MONEY!

SMEs are considered to be the backbone of the PH economy. However when it
comes to accessing finance , banks and FIs tend to bat an eye against SMEs.
WHY IS THIS THE CASE?

WHY IS IT IMPORTANT FOR SMES TO ACCESS

FINANCE?
Although laws such as the Magna Carta for MSMEs, Barangay Micro Business
Enterprise Act, Innovative Startup Act, and Go Negosyo Act were implemented, there is
still a large gap between SMEs and easily accessible loans. High interest rates, slow
processing times, and the stigmatized look of lenders to SMEs all factor in to this gap.
The creditworthiness of SMEs and their limitations would not improve if their access to
finance remains a challenge. If this hindrance to finance continues, the economic
backbone of the Philippines will surely fall.
simply put, access to finance helps SMEs to survive, grow, and
innovate.

WHY DO SMEs HAVE A HARD TIME WITH

GETTING FUNDING?
1 SIZE MATTERS
(apparently bigger is better)

While medium enterprises still get better higher

chances of accessing finance, the margin is
relatively small when compared to small
businesses. The bigger your capital and assets are,
the better.
SME's AGE
(lenders like them older)
2
This is where majority of SMEs struggle as lenders
look at the age of a business as a measure of its
reliability and sustainability. They tend to favor older
firms as with age comes experience. In the eyes of
banks and Financial Institutions, SMEs have a low

FINANCIAL survivability rate when compared to large businesses.

3 PERFORMANCE
(do better, get more)
Banks and Financial Institutions need to know if you are
capable of repaying that loan you wish to get.
Therefore, they measure an SMEs financial performance
through different methods to see if it earns enough to
repay its liabilities without hindering its operations.

SO WHAT CAN WE DO?

IS THE
BFP KEY!
BETTER FINANCIAL PERFORMANCE
Research shows that ACCESS TO FINANCE significantly affects an SMEs
FINANCIAL PERFORMANCE!

USE YOUR PROFITS?

ASSETS!
A higher asset turnover raises your
chances at getting that sought-after
credit! Use your assets to generate higher
revenues. Not only will it look good for
your credit rating, it will also help
strengthen your business and maybe, just
maybe, you got enough cash that you
won't need that loan anymore.
PROFITS!
The best way to get cash is to earn it! If
your business is profitable, chances are
that applying for a business loan would be
a breeze. Banks and financial institutions
like it when a business is profitable as it
indicates the ability to repay loans since
the business earns more than what it
spends. A profitable business is a
creditworthy business.

Think of access to finance and financial performance as a cycle. To be able

to access finance, one must have good financial performance. When there is
access to finance, financial performance increases.

THIS INFOGRAPHIC WAS MADE AS AN OUTPUT OF A RESEARCH PAPER WRITTEN BY

GISELLE ROSE G. DE GUZMAN, ANNA MARTINA L. ESMILLO, AND BEN RYAN M. TOREJA
UNDER THE GUIDANCE OF THEIR ADVISER, DR. JENNIFER M. PEREZ CPA.