Best Long-Term Small Business Loans Explained

SME Financing
June 27, 2025

For Small and Medium Enterprises (SMEs) in the Philippines, securing stable, long-term financing is essential for sustained growth and ambitious expansion. These types of loans provide businesses with substantial capital and extended repayment periods, enabling crucial investments in areas like new equipment, significant facility upgrades, or strategic market expansion.

The challenge of accessing sufficient capital is particularly acute for the backbone of the Philippine economy. According to research highlighted by Fintech News Philippines, over 99% of registered businesses in the country are MSMEs. Yet, a significant portion, as much as 77%, have reported difficulties in accessing sufficient funding over the past five years. This highlights a critical need for accessible and understandable financing solutions.

In this article we aim to bridge that gap. We'll guide you through the various long-term small business loans available for your enterprise, explaining their features, benefits, and the steps involved in securing them, so you can make informed decisions for your business's future

What are Long-Term Small Business Loans?

Long-term small business loans are funding solutions that provide businesses with large capital amounts to be repaid over several years—typically from 3 to 10 years or more. These loans are used for major expenses like expanding operations, buying equipment, or refinancing debt. They come with fixed or variable interest rates and predictable monthly payments, making them suitable for stable, growth-focused businesses.

What are the Benefits of Long-Term Small Business Loans?

Long term small business loans offer essential financial support for businesses looking to grow and expand. They provide the opportunity to secure stable funding over an extended period, ensuring a strong foundation for future success.

Here’s how:

  • Lower Monthly Payments: Spread your repayments over several years, reducing the pressure on your monthly cash flow.
  • Access to Larger Amounts: Secure more substantial funding for major projects like buying property or upgrading machinery.
  • Stability and Predictability: Fixed interest rates and terms help you confidently plan your finances.
  • Business Growth Support: Use the funds to expand your team, enter new markets, or launch new products.
  • Preserving Equity: Unlike equity financing, long-term loans don’t require giving up ownership or control of your business, which allows you to retain your stake.

While long term small business loans offer many advantages, qualifying for one requires meeting specific criteria. Let’s look at what you need to secure a long-term loan for your SME. 

How to Qualify for a Long-Term Small Business Loan?

If you’re aiming for a long-term business loan, you need to meet specific qualifications that most banks and lenders look for. Here’s what you should prepare:

  • Business Registration and Legality: Make sure your business is registered with the Department of Trade and Industry (DTI) or the Securities and Exchange Commission (SEC), and that you have all necessary permits and licenses. This confirms your business is legitimate and operating legally.
  • Length of Operations: Many lenders require your business to be operational for at least 1–3 years, with some banks like BPI and Security Bank setting a minimum of 3 years for term loans.
  • Financial Health: Prepare your latest audited financial statements and income tax returns. Lenders want to see that your business is profitable and can handle monthly repayments.
  • Good Credit Standing: Your personal and business credit history matters. Lenders check if you have a good track record of paying your debts on time.
  • Collateral (if required): Some long-term loans require collateral, such as property or equipment, while others are available unsecured, depending on your creditworthiness.
  • Age and Residency: You should be at least 21 years old and a resident of the Philippines. Some lenders set a maximum age limit at the end of the loan term.

By meeting these requirements, you can improve your chances of approval and secure the best possible terms for your business's growth. But now, what types of long-term business loans are available, and which one fits your needs?

Types of Long-term Small Business Loans

Understanding the different long-term business loans available helps you choose the right financing for your SME. Here’s a breakdown of the types, what they mean, and what you can expect from each loan type:

1. Term Loan

A lump sum loan repaid over a set period, ideal for major investments like purchasing equipment or expanding your business.

  • Loan Amount: Typically from ₱2 million to ₱20 million or more, depending on your collateral and the lender.
  • Terms: Repayment periods range from 1 to 25 years, with most SME-focused term loans offering 1 to 7 years.
  • Repayment: Fixed monthly installments covering both principal and interest. Some loans include a grace period before repayments start.

2. Unsecured Loan

A loan that does not require collateral, relying instead on your creditworthiness.

  • Loan Amount: Typically up to ₱7.5 million, depending on the lender and your business’s financial health.
  • Terms: Shorter repayment periods, usually 12 to 36 months.
  • Repayment: Fixed monthly installments. Interest rates may be higher than secured loans.

3. Startup Loan (New Business Loan)

Designed for new businesses or entrepreneurs, this loan helps you launch or establish your business.

  • Loan Amount: Varies, but generally smaller than established business loans.
  • Terms: Flexible, often with shorter repayment periods (1 to 3 years).
  • Repayment: Monthly payments. Approval often depends on your business plan and proof of concept.

4. Equipment Financing

This loan is specifically designed to help small businesses acquire new or used machinery, vehicles, technology, or other essential equipment needed for their operations.

  • Loan Amount: Lenders may finance a substantial portion, often 70% to 90% of the equipment's purchase price.
  • Terms: Typically aligns with the useful life of the equipment, commonly ranging from 1 year (12 months) to 5 years (60 months).
  • Repayment: Repaid in fixed monthly installments, designed to be manageable within the business's cash flow.

With a better understanding of the loan options available, let’s walk through the steps you’ll need to take to apply for a long-term loan successfully.

Steps to Obtain a Long-Term Small Business Loan

Here are the typical steps to obtain a long term small business loans in the Philippines, tailored for SME owners:

1. Assess Your Needs and Eligibility

  • Identify how much funding you need and what you’ll use it for.
  • Check if your business meets common requirements: at least 2–3 years of profitable operations, good credit standing, and proper registration (DTI, SEC, or CDA).

2. Prepare Required Documents

  • Gather your business registration certificates (DTI, SEC, or CDA), business permits, and other official documents showing your business address.
  • Prepare audited financial statements, income tax returns, and possibly a business plan if required.
  • Have valid IDs and proof of residency ready for all business owners or authorized signatories.

3. Compare Loan Offers

  • Research different banks and financial institutions to compare interest rates, loan terms, and fees.
  • Look for government-backed or SME-specific programs if you qualify.

4. Submit Your Application

  • Fill out the loan application form, either online or at a bank branch.
  • Submit all required documents along with your application.

5. Undergo Credit Evaluation

  • The lender will review your business’s financial health, credit history, and repayment capacity.
  • They may request additional information or documents during this stage.

6. Loan Approval and Disbursement

  • If approved, review the loan agreement carefully before signing.
  • Once signed, the loan amount will be disbursed to your business account.

7. Start Repayment

  • Begin making monthly repayments according to the agreed schedule.
  • Keep your financial records updated for future needs.

To illustrate how these steps come to life, let's consider a common situation:

Maria owns a successful bakery that has been operating profitably for five years. She wants to buy a larger commercial oven and expand her production space, estimating the total cost at PHP 2 million.

Here's how Maria navigates the process:

  • Assessed Needs: Maria identifies her PHP 2 million need for the oven and expansion. She confirms her bakery's eligibility with five years of profitable operation and proper DTI registration.
  • Prepares Documents: She meticulously gathers all required documents, including her DTI certificate, renewed mayor's permit, audited financial statements for the past three years, and her personal and business ITRs. She also drafts a detailed business plan.
  • Compares Offers: She compares offers from commercial banks and researches SB Corp's RISE UP program. Weighing interest rates, terms, and potential grace periods, she opts for SB Corp.
  • Submits Application: She fills out SB Corp's online application and uploads all her scanned documents.
  • Undergoes Evaluation: An SB Corp officer contacts Maria for clarification on her financials and project costs. She promptly provides the requested information.
  • Receives Approval & Disbursement: A few weeks later, her PHP 2 million loan is approved. She reviews and electronically signs the loan agreement, noting the 5-year repayment term and competitive interest rate. The funds are disbursed to her business account within 24 hours.
  • Starts Repayment: Maria sets up automatic monthly payments, ensuring timely repayment as she focuses on growing her bakery.

While long-term loans are ideal for significant investments, remember there are other financing options available that might also suit your business needs, such as short-term working capital loans or specialized grants.

What are the Alternatives to Long-Term Small Business Loans?

If a long-term small business loan isn’t the right fit for your SME in the Philippines, several alternative financing options are available, each with its own advantages and considerations:

  • Invoice financing: It allows SMEs to convert outstanding invoices into immediate cash. Instead of waiting for clients to pay (which can take 30, 60, or even 180 days), you sell your unpaid invoices to a third-party financier at a discount and receive a significant portion of the invoice value upfront—usually between 60% and 80%. Invoice financing is offered by various providers, including platforms like n90.
  • Microloans: Ideal for small businesses or startups, microloans offer smaller amounts (often from ₱5,000 to ₱500,000) with shorter repayment terms and less stringent requirements. These are commonly provided by microfinance institutions like CARD Bank or ASA Philippines.
  • Peer-to-Peer (P2P) Lending: Platforms like Kiva Philippines connect businesses directly with individual investors, offering flexible terms and competitive rates. This is a good option if you have a solid business plan but limited collateral.
  • Credit Lines and Revolving Credit: Instead of a lump-sum loan, you can access funds as needed up to a set limit, paying interest only on the amount used. This is useful for managing cash flow or handling seasonal demand.
  • Equity Financing: If you’re open to sharing ownership, angel investors or venture capital firms can provide funding in exchange for equity. This is suitable for high-growth startups in tech, agriculture, or retail..
  • Crowdfunding: Platforms allow you to raise funds from a large number of people, often in exchange for rewards or equity. This is a creative way to fund new products or business ideas.
  • Secured Loan: A loan backed by collateral, such as real estate or equipment, reducing risk for the lender and often resulting in better terms. The higher limits of secure loan is up to ₱50 million or more because of the collateral. In this type of loan, repayment periods can extend several years, similar to term loans.

Among the alternatives, invoice financing stands out as a highly flexible and fast solution for improving cash flow. Here's why it could be the perfect fit for your business.

How n90 Simplifies Long-Term Loan Options for Small Businesses?

Whether your business needs quick capital for day-to-day operations or significant funds for long-term growth, n90 is here for you. We understand that effective financing is crucial for small businesses to thrive in the Philippines.

Why Choose n90?

n90 offers flexible solutions designed to meet various business needs. If you're looking to seize growth opportunities, cover immediate expenses, or make strategic long-term investments, n90 aims to provide the capital you need without unnecessary delays.

Eligibility for n90 Financing:

To be considered for financing through N90, your business must meet the following criteria:

  • You are a resident of the Philippines with a valid government-issued ID or an Alien Registration Card (ARC).
  • Your business is properly registered with BIR (for tax purposes) and either DTI (for sole proprietorships) or SEC (for partnerships or corporations).
  • Your company's annual revenue is at least ₱25 million.

With n90, access the capital you need quickly and keep your business growing, whether your goals are short-term or long-term.

Conclusion 

Securing the right long-term small business loan can truly be a game-changer for your company’s growth in the Philippines. Whether you're looking to expand operations, purchase essential equipment, or make strategic investments, understanding your financing options is key to making the best choice for your business's future. With their favorable terms and often lower interest rates, long-term loans provide the substantial capital you need without putting an undue strain on your immediate finances.

When you're ready to explore these possibilities and find the perfect fit for your business's unique needs, remember that n90 offers flexible and tailored solutions. From long-term small business loans designed for significant growth initiatives to invoice financing for immediate cash flow and bridge loans for short-term gaps, n90 is here to help keep your business running smoothly and efficiently.

Ready to access the capital your business needs to grow? Get started with n90 today. You can speak to us directly at +63 962 663 1393 to discuss your options and take the next step towards securing your business's financial future.

FAQs

1. Can a startup business qualify for a long-term loan in the Philippines?

A. Qualifying for a traditional long-term loan can be challenging for very new startups due to the lack of operating history and proven profitability. However, some specialized government-backed programs (like certain SB Corp initiatives) or specific venture capital firms might offer long-term financing options tailored for promising startups, often with different criteria or requiring substantial business plans and projections.

2. How does the n90 application process work, and what are the eligibility requirements?

A. To apply for n90 financing, simply fill out the online application with your business details and required documents. Eligibility requires your business to be registered with BIR, DTI (for sole proprietorship), or SEC (for partnership/corporation), and to have an annual revenue of at least ₱25 million. You must also be a resident of the Philippines with a government-issued ID or Alien Registration Card.

3. What role does collateral play in obtaining a long-term small business loan?

A. Collateral plays a significant role in many long-term small business loans, particularly equipment financing, and commercial real estate loans. Pledging assets like real estate, machinery, or vehicles reduces the risk for the lender, which can lead to higher loan amounts, more favorable interest rates, and longer repayment terms. Some government programs offer collateral-free options for smaller loan amounts.

4. What types of financing does n90 offer to small businesses in the Philippines?

A. n90 provides flexible financing solutions tailored to diverse business needs. This includes short/long-term small business loans for major investments like expansion or asset acquisition, invoice financing to unlock immediate cash from outstanding invoices, and bridge loans for short-term capital gaps. 

5. How can invoice financing help my SME?

A. Invoice financing allows you to turn outstanding customer invoices into immediate cash, improving your cash flow without waiting for clients to pay. This is especially useful for businesses with long payment cycles.

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