Requirements for Setting Up a Lending or Financing Company in the PH

A gateway to Southeast Asia and a business hub, the Philippines is currently being served by an increasing number of progressive and innovative Lending and Financing Firms and Companies. These lending and financing services have helped startups and small and micro enterprises (SMEs) jump-start operations by providing access to a wide range of options for financing, inclusive of short-term corporate loans, salary loans, and invoice financing. 

If you’re working with a lending or finance company, make sure your accounting and bookkeeping systems are updated to prevent any payment issues or problems with your business’ cash flow. Similarly, if you’re looking to set up your own lending or finance company to help others with their cash flow, you must comply with the requirement set by law. Noteworthy, Lending Companies and Financing Companies may sound similar, but there are differences between the two acknowledged in the Philippines.

Both companies do not include banks, investment houses, loan and savings assistance, insurance companies, cooperatives, and other financial institutions organized and operating under other special laws. These are the primary differences between a lending and financing companies, along with the requirements needed to set them up in the country.  

Lending Companies

Under the Lending Company Regulation Act of 2007, also known as RA No. 9474, a Lending Company is defined as a corporation engaged in granting loans from its own capital funds or from funds sourced from 19 persons or less.




The key requirements of the criteria for operating a Lending Company under RA No. 9474 are:


– The Lending Company must be established as a stock corporation in the SEC

– The Lending Company maybe 100% owned by foreign nationals, where restrictions may apply when loans are secured by land

– Words that describe the company’s primary activity of loan granting to the public should be included n the corporate and trade name, like “lending company” or “lending investor”

– At least 51% of their funds must be used for direct lending purposes.

– Must have a minimum paid-up capital of One Million Pesos, unless SEC says otherwise

– Must commence within 120 days of being granted a Certificate of Authority to operate as a lending company

Financing Companies

The Financing Company Act of 1998, also known as RA No. 8556, defines a Financing Company as a corporation organized for extending credit facilities to consumers and to industrial, agricultural, or commercial enterprises by factoring or discounting commercial papers or accounts receivable, buying, and selling contracts, chattel mortgages, leases, and other evidence of indebtedness, financial leasing of immovable and moveable property, or by direct lending.




The key requirements for criteria under the law governing Financing Companies include the following:


– The Financing Company must be registered as a stock corporation at the SEC

– The company maybe 100% owned by foreign nationals; however, the constitutional requirements on foreign land ownership still apply and must be observed

– Must have a minimum paid-up capital of no less than Ten Million pesos if the company is in Metro Manila or another first-class city in the country, note that different capitals may apply if the company is situated outside a first-class city

– The name of the company must contain the term “finance company”, “financing company”, “finance and investment company”, or any other term describing the operations and activities of a financing company

– Certificate of Authority to Operate

Securing the Certificate of Authority to Operate

All specific registration requirements may be found on the SEC website under the “Secondary License” category. Both types of companies must submit 4 copies of the application pack to the SEC. This includes:


– Notarized Application Form signed under oath by the company President

– Company Information Sheet

– Articles of registration of Incorporation and By-laws

– NBI Clearance

– President’s Sworn Statement and Undertaking

– Evidence of paid-up capital 

– Treasurer’s Affidavit

– Clearance from the BSP if the company is a subsidiary of a bank or non-bank financial institution with a quasi-banking license

SEC Reporting Requirements

Below are the reporting requirements of the SEC that both Lending and Financing Companies must comply with.


– General Information Sheet filed within 30 days from the annual stockholders’ meeting

– Audited financial statements submitted on or before April 15 for companies with fiscal years ending December 31, and within 120 days from the fiscal year end if the fiscal year ends on any other date

– Special forms for Financial Statements, Lending Companies, and Financing Companies have separate forms

– Semi-Annual Financial Statements submitted every July 15 and January 15


All of these requirements must be met so you can operate. If you need help, call our team of accounting experts. Our firm also provides business registration services so we can get you started. Call us for a free 30-minute consultation.