Banks are scrambling to find borrowers. Interests are much lower now than they used to be. During the uncertain times when President Marcos was still in power, getting a bank loan was at usurious interest rates. One had to shell out through the nose about 36% of annual interest which included other charges. Such high interest rate continued to the time of Tita Cory. It started to subside during the 90s or the time of FVR. Only for it to surge due to the uncertainty of Erap’s (who did time in jail) term. Then it started going down due to the country’s ensuing stability.
Now, despite PDu30’s age and uncertain health, including the destabilization efforts of so called terrorists, interest rates have gone so low. Good for us. Good for the country.
There’s a lot of cash in circulation that bank’s don’t know what to do with their excess cash. They are coming up with innovative products with fancy names which could not have been possible in the recent past. They now can lend millions of pesos even without collateral at relatively low interest. For collateralized loans, they can even charge much lower interest. For prime clients, as low as 5% per annum or even lower.
Rural banks which used to lend out at 16% up to 22% (including other charges) per annum are now lending out at 10% interest per annum for collateralized loans.
One good effect of this is that cooperatives which used to lend at 16% per annum even if they are wallowing in cash will now have to lower their interest charges. Though it might take time for them to realize this.
So for the enterprising types, this is the time to borrow money for business purposes. For those who are contented with what they have or are earning and not confusing what they need with what they want (which can be unlimited desire for material things), they don’t care about borrowing in the name of material progress—which also means stressful living. So they live comfortably.
For those who are not yet financially secure, this might be the time to be daring.
There is, however, a requirement (among other things) aside from capital which banks can now provide with easier terms. And this is industry or hard work.
Thus, for the lazy butts, forget about borrowing money for business purposes.**