Wednesday, March 16, 2016


        CAPITAL, this is one of the problems of some persons who wish to start an enterprise or a business. They wish to engage in business but the lack of money as starting capital prevents them.
 However, those who wish sincerely to engage in business enterprise need not worry. First, out of their present income, they can save a portion of it until they have accumulated enough cash to start a business. 
Second, if they cannot save, they can source it from their respective family members or friends who are willing and able to lend.
  Third, they can look for available sources of funds, like from the banks, lending companies, foundation and cooperatives.
In applying for a loan, one must assess his strengths, weaknesses, opportunities and treats. It must be remembered that the lender is highly interested how a borrower can repay a loan. Lenders will evaluate a borrower’s financial status and may even demand collateral like real estate.
    If a loan is secured, and in order to utilize fully the loan proceed, a borrower must determine the amount of money he needs as capital and the items where to spend the money. This will enable the borrower to borrow the best loan package.
 When going to the loan providers, the borrower must know the loan package they offer and its lending terms. This will guide the borrower to pick the best offer. The borrowers must know the following before deciding from which lending institution to borrow and which loan package to select.
a.Minimum Qualification – Most lenders also look over the loan applicant’s experience in the business. He will consider profitability of the enterprise and other sources of income of the borrower/applicant. The lender also looks after the qualification of the borrower like his age and capacity to repay the loan.
b.Required Documents – Borrower must have the list of required documents for the loan application. Documents like government issued ID, business permits and registration certificates are necessary.
c. Application and Loan Release Process – Lenders have different process. Some lenders can evaluate loan application and release loan fund in a few days. Loan applicant can file loan application by fax, online or via the internet. He may also personally visit a bank to file his application. 
d. Interest Rules – Possible borrower can canvass the possible lenders for their rate of interest and other charges. The term of payment, either monthly, quarterly or annually must also be known.
e. Payment Term – A borrower may decide how many months to pay for his loan. There are short term loans such as the revolving fund which maturity is one year. Long term loans usually mature from seven to 25 years. This enables the borrowers to avail of short or long term loans.
    For borrowers who wish to borrow money for business operation or personal expenses without going to the bank office, they can do it “online”. Borrowing online helps the borrower save time and effort and expenses in going personally to the bank.

    For those who has neither savings nor borrowed money, they can start wihtout capital. There  are offices which projects do not need cash to start with for the barangay people on food production.
    The Department of Agriculture (DA) for instance has the livestock dispersal project. The DA disperse breeds of swine and cattle. It also provides vegetable seeds for vegetable production. These are given free to the farmers to take care of, the product of which accrues to them.
They can grow these vegetables and sell it in the market, the sales of which belong to them. Out of these vegetable project, they can sell the surplus which will serve as their savings.
    The cattle and swine dispersal provides them with either milk, or beef or pork which they can sell in the market. Out of the money from the sales of livestock products will enable them to save while they can eat the surplus beef and pork and drink fresh milk.
   The recepients of these cattle dispersal projects may pay the government by giving offsprings of swine and or cattle to their neighbor farmers. Hence, capital is available if our people are innovative./MP

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