6 Options for Funding Your Startup Business in the Philippines

There are many things you need to start your own business. For one, you need a viable idea. You also need to conduct some research about the industry, your target market, and your competitors. Then, you need to draw up a plan where you can document your brand identity, work processes, marketing plan, and overall business goals.

Arguably the most important, however, is funding. After all, no matter how brilliant your business idea is, you can’t get it off the ground without investing some money. Fortunately, would-be entrepreneurs and future CEOs now have more options to acquire initial capital. According to PricewaterhouseCoopers’s 2020 Philippine startup survey, for example, there are now more than 50 angel investors and more than 40 venture capitalists in the country.

That said, before you choose how you’ll fund your startup, it’s best to know all your available financing opportunities. This way, you can really pick what’s best for your business idea and goals. It’s also important to note that you don’t have to rely on only one; depending on your situation, making use of two or more financing options may be viable. Here are a few you can choose from:

Liquidating Your Assets

Some people sell preloved items like clothes, toys, books, and small appliances when they need extra cash. In the same way, you can also liquidate your assets to fund your small business. Aside from the previously mentioned items, some other things you can sell include the following:

  • a vehicle, like a car or a motorcycle
  • rare items, such as antiques, limited edition toys
  • jewelry, including watches
  • “hype” sneakers
  • real estate

You can then use the proceeds from the sales to register your business, purchase some office equipment, or invest in marketing materials. If you want, you can also use the money to enroll in short courses that can equip you with the skills and knowledge to run a business.

What’s great about this funding option is that you won’t owe money to lenders. Keep in mind, however, that you need to be patient. The economy will dictate prices and the demand for goods, so you may have to adjust prices and sales strategies accordingly. For vehicles and real estate, you should also factor in the effort and cost of transferring titles, paying taxes, and the like.

Securing Personal Loans

If you think you don’t have enough items to sell or if you’d rather not go to the minutiae of selling, you can go for a personal loan to finance your startup. Usually, there are two options: a bank or a private  lending company. You can also opt to use a loan app for quicker approvals; just make sure that the loan app is by a trusted company to ensure your security.

What you have to remember about a personal loan is that it has a lower maximum amount you can borrow compared to a small business loan. This is because for you to be eligible for the latter, your business has to have been operating for a year or two and turning a good profit. That said, you can use a personal loan to establish your creditworthiness. This way, as your startup thrives, you can make the most of business loans in the future.

Borrowing from Family and Friends

One of the downsides of securing loans is that you have to (1) file applications, (2) submit documentary requirements, and (3) wait for approval before being able to access the funds. Granted, it’s easier than ever to do the first two because of the widespread digitalization of processes. For example, some lenders don’t have any paper forms. Instead, you’ll be directed to sign up and submit photos or scanned copies of relevant documents through an app.

Still, if you’re a little hesitant to borrow money from financial institutions, you can try borrowing from your family members or friends instead. What’s great about this is that these family members or friends you approach may also be interested in your business. Thus, the borrowed money may be considered an investment on their part.

To keep things professional, make sure to have an agreement drafted, printed, and signed. Even if you have a close relationship with the people you borrowed money from, it’s still essentially a business transaction. It’s also common knowledge that financial concerns can sometimes put a strain on personal relationships. By having a binding document, you can keep your personal and professional lives separate.


Crowdfunding, as its name implies, relies on a crowd to fund or support a project or venture; in this case, your startup business. What differentiates crowdfunding is that the money can come from anyone—even strangers and people from halfway across the world!

However, keep in mind that you have to promise your backers something in return. For example, you can give them exclusive gifts once your business is launched. For those who pledged the most money, you can consider offering them equity in your business. This is why some of the most successful crowdfunding projects have products to offer (e.g., video games, apparel, or cosmetics).

Interested in crowdfunding your startup? Here are a few simple steps to follow:

  1. Choose a crowdfunding platform. Two of the most popular ones are GoFundMe and Kickstarter.
  2. Prepare a backgrounder about your company.
  3. Set a funding goal and choose a timeframe. Note that GoFundMe lets you keep a project (campaign) active even after the goal has been met, while Kickstarter allows you a maximum of 60 days.
  4. Determine the rewards you want to give your supporters once you hit your funding goal.
  5. Promote your crowdfunding link.

Of course, there are differences among the various crowdfunding platforms available these days. Make sure to do your research to find the one that best suits your business needs and style. That said, one downside of crowdfunding is that you don’t know when you will reach your target amount. Thus, it may not be ideal as your main source of business funding if you’re planning to start ASAP. It may be best to use it as a supplementary source of capital.

Credit Cards

If you have a personal credit card, you can use it to get a cash advance or to pay for things like office equipment for your business. Of course, you should only do this during the early stages of your business. Once you’ve made reasonable profits, you should consider getting a business credit card. This way, you can draw a clear line between your personal and business expenses.

One good thing about this funding option is that you might have an easier time applying for it. As long as you’re in good standing with your personal credit card, your provider may be more inclined to approve you for a business credit card. Another benefit of having a business credit card is that you may enjoy different perks, including more rewards points or exclusive discounts.

Finally, using credit cards to fund your startup business helps you establish a positive credit reputation and increase your credit score. These will then help you qualify for other products in the future, such as a business loan. With a good credit rating, you may also receive a higher credit limit on both your personal and business credit cards.

Angel Investor

An angel investor, sometimes called a seed investor or an angel funder, is essentially a person with a high net worth who provides a startup business with financial backing. In exchange, they will ask for ownership equity, a share in profits, or other perks from the company. Do note that an angel investor can be anyone, even the aforementioned family members or friends from whom you borrow money.

One of the best things about having an angel investor is that they are more than willing to shell out a huge amount to get your business up and running. The reason for this is simple: the sooner you can make a profit, the sooner they can receive a return on their investment. Many angel investors are also seasoned businessmen. As such, they know the risks involved and can even help you run your startup by providing tips or market insights. This can be a great opportunity to learn and may even be the best-case scenario for a complete newbie in entrepreneurship.

The downside is that you may want to have more autonomy about how your business is run, which can be difficult if an angel investor has a large stake in your company. To prevent conflict, make sure that all parties are on the same page before the funding arrives in your bank account.

It takes a lot of courage and hard work to get a startup business off the ground. There are plenty of hurdles to overcome, including financial constraints. Don’t let such a challenge stop you, however. Consider these funding options carefully and choose one that suits your business and your management style the best. Once you get over the initial difficulty, you can start gaining momentum towards success.

Good luck and more power to your business endeavors.