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Without money, most businesses would not come to fruition. It’s like a lifeline that is essential for every company’s growth.
Unfortunately, obtaining enough business funding can be difficult for small and startup businesses. This is where business grants come in handy.
These grants can not only be used for building a business from the ground up, but also for expanding operations, purchasing new inventory and equipment, and improving cash flow, among many others.
In most cases, these funds are even vital to cover operating costs until the company becomes profitable.
Thankfully, finding business grants in the Philippines is not as difficult as it may seem. There are plenty of options available to entrepreneurs, ranging from government grants to private organizations that offer financial aid to startups and small businesses.
If you want to know more about how to secure business grants in the Philippines, you’re on the right page.
What are Business Grants?
A business grant is a type of financial aid that is given to entrepreneurs by either government or private organizations. These grants are usually awarded with the intention of encouraging business growth and development.
Unlike business loans, most business grants do not have to be repaid, which makes them an attractive option for entrepreneurs who need funding but do not want to accrue debt.
Note: We will still be including low-interest loans provided for startups below.
Pros & Cons of Getting a Business Grant in the Philippines
Here are the advantages and disadvantages of getting a business grant.
It does not need to be repaid
This means that entrepreneurs do not have to worry about paying back the money they received, which can be a huge burden off their shoulders.
This allows them to focus on building and growing their business without the added stress of loan repayments or high interest rates.
You’ll be likely to receive other grants
If you are able to secure one business grant, you may become more eligible for additional grants in the future.
When you receive a grant, it shows that your business is a promising and worthwhile investment, making it more attractive to other funding sources.
It gives you credibility
When you receive a business grant, it not only provides you with the necessary funds to grow your business, but it also gives you credibility in the eyes of potential investors and customers.
This can help you establish a positive reputation in your industry and attract more opportunities for growth.
Applying for it is time-consuming
The application process for business grants can be quite lengthy and time-consuming.
Entrepreneurs will need to dedicate a significant amount of time and effort in order to prepare and submit their grant proposals.
This can be a challenge for those who are already juggling multiple responsibilities.
It can be hard to receive a grant
Competition for business grants can be tough, especially since many other entrepreneurs may also be vying for the same funding.
As a result, some businesses may not be approved for a grant, which can be discouraging and may require them to seek out alternative funding sources.
Your grant may not be renewed
Business grants usually have a limited duration and may not be renewed once they expire.
This means that entrepreneurs cannot fully rely on these funds on a long-term basis and will need to find other ways to finance their businesses in the future.
Your business will be restricted
In some cases, business grants come with certain restrictions, such as how the funds can be used or what types of products or services the company can offer.
This can limit the entrepreneur’s creativity and flexibility in running their business.
Related: How to Start a Business in the Philippines
Types of business grants in the Philippines
There are various types of business grants available in the Philippines, each with its own specific requirements and qualifications.
Here are some of the most common types of business grants available.
1. Department of Trade and Industry (DTI) programs
Did you know that MSMEs make up 99.5% of businesses in the country and employ 63% of the country’s labor force?
The Department of Trade and Industry finances these types of businesses through its financing arm, Small Business Corporation. After the pandemic, the Department of Trade and Industry focused on reviving MSMEs.
2. Department of Science and Technology (DOST) programs
DOST programs are focused on initiatives and programs that are geared toward improving core technology, enhancing or refining the market potential of a product, as well as changing existing processes and services.
3. Other government agencies
Aside from DTI and DOST, there are other government agencies that offer business grants in the Philippines.
These include the Department of Agriculture (DA), the Department of Social Welfare and Development (DSWD), and local government units, among many others.
Each agency has specific programs and initiatives geared towards helping entrepreneurs in various sectors, from agriculture, tourism, renewable energy, women empowerment, and many more.
Private sector grants
1. Non-governmental organizations (NGOs)
There are also private sector grants available for entrepreneurs in the Philippines. Non-governmental organizations or NGOs are examples of such organizations that provide financial aid to small businesses and startups.
These NGOs often focus on social impact and may require the businesses they fund to have a specific mission or goal related to social welfare or environmental sustainability.
2. Foundations and corporate social responsibility (CSR) programs
Other types of private sector grants available in the Philippines include foundations and corporate social responsibility programs.
These organizations provide funding for businesses that align with their values and goals. For example, a foundation focused on environmental preservation may provide grants to businesses that use sustainable materials or reduce their carbon footprint.
Similarly, a company with a CSR program that supports education may provide funding to businesses that promote educational opportunities for underprivileged communities.
3. Business competitions and start-up incubators
In addition to government and private sector grants, there are also business competitions and start-up incubators that provide funding and resources for entrepreneurs in the Philippines.
Business competitions are events where entrepreneurs pitch their business ideas to a panel of judges for a chance to win funding and other resources.
These competitions can be sponsored by government agencies, private companies, or non-profit organizations.
On the other hand, startup incubators are programs that provide mentoring, training, and funding for early-stage businesses and founders.
These programs may or may not require entrepreneurs to give up a portion of their equity in exchange for the support they receive.
Top Business Grants and Startup Incubators in the Philippines
If you’re an entrepreneur in the Philippines looking for funding opportunities, there are plenty of options available to you. Here are some of the top business grants and startup incubators you can explore.
DICT Startup Grant Fund
If you are an ICT-based startup with a registered business in the country (DTI and SEC), as well as a registered startup number, you can be eligible for this grant.
Startups who are encouraged to apply for this grant should have Proof of Concept To Prototype or Prototype to The Minimum Viable Product.
To register, simply go to this page. To make your application easier, follow the templates found here.
HEAL (Metrobank Foundation)
HEAL stands for Health, Education, Arts, and Livelihood. The United National Sustainable Development Goals serve as the guiding framework for this partnership with charitable and socio-civic organizations in hopes to improve nation-building.
British Council of the Philippines
Grants by the British Council of the Philippines aim to encourage creativity and innovation in the society. It helps to foster collaboration with numerous stakeholders on social enterprise, particularly in the academe and government.
Aside from social enterprise coalition building, these grants also pushes for generating research on local enterprise development, the inclusion of social enterprise in local government, and policy engagement.
The grants are open for coalitions, social enterprises, local chambers, and local civil society organizations working in the Bangsamoro region.
DOST Business Grants
DOST offers grants for businesses that help to harness the Philippine scientific and technological efforts and capabilities to achieve sustainable economic growth and development.
Here are some DOST grants to explore.
PCIEERD Startup Grant Fund Program
In line with the Innovative Startup Act of 2019, this grant was launched to provide fund assistance to help companies overcome R&D roadblocks, refine business models, prepare a business continuity plan, establish initial market traction, and strengthen intellectual property.
This grant provides up to P5 million in funding for research and development activities.
Young Innovators Program (YIP)
This grant is meant to engage young, talented, and skilled students from high school who want to get experience and conduct research for a maximum period of one year.
The different priority programs for this grant include interventions for resilient and sustainable communities, interventions for industry productivity and competitiveness, and the development of core technologies.
PCHRD Startup Research Grant Program (SGP)
This is meant to fund the research and development activities of Filipino-owned startups and promote the startup scene in the country.
The objectives of this grant include helping qualified startups overcome R&D roadblocks, strengthen intellectual property, establish initial market traction, refine business models, and scale up production.
Collaborative Research and Development to Leverage Philippine Economy (CRADLE) – Industry, Energy, and Emerging Technology
This program’s objective is to enable local companies to take advantage of technological advancement and innovation, as well as increase the growth of the country’s innovation system.
Through this program, Filipino companies can do research and development to improve their services, processes, and products to become more competitive in their industry.
All beneficiaries of this program must produce 20% counterpart funding and ensure to adopt the technology developed through the grant.
Small Enterprises Technology Upgrading Program (Set-Up)
This is another program by the DOST that aims to encourage and assist MSMEs adopt technology and innovation to improve their productivity, operational efficiency, and competitiveness.
It addresses technical problems through the infusion of technologies to products and services, assisting in HR training, designing packages and labels, assisting in product standard establishment, helping with database management systems, and providing assistance for technology acquisition.
DTI Pondo sa Pagbabago at Pag-asenso (P3)
Also called P3, the main objective of this program is to give financing to micro-entrepreneurs throughout the Philippines by giving them cost-efficient microloans with only 2.5% monthly interest.
Self-Employment Assistant – Kaunlaran (SEA-K) Program
This program by local government units and DSWD aims to help with the socio-economic skills of families through organizing community-based associations for entrepreneurial development.
The components of SEA-K involve social preparation and capital assistance up to P150,000 or P5,000 per member. It also includes technical assistance and savings mobilization.
Development Advocacy (DevAd) Program
This is an innovative lending program for companies with sustainable projects who do not have the capital nor the track record to make their vision come to life.
Eligible borrowers of DevAd include agri-based entities, NGOs, MSMEs, cooperatives, associations, and federations.
Meanwhile, the loan amount depends on the project requirement, but a maximum of 80% of the total project cost.
Proyekto sa Kauswagan sa Katilingban (PKK)
Proyekto sa Kauswagan sa Katilingban or PKK is a lending program that’s meant to help improve the conditions of the marginalized sector through values formation, livelihood training programs, regular and special savings accounts, capital build-up, and loan funds to micro-entrepreneurs.
This initiative usually targets those involved in income-generative activities, especially women who cannot access credit facilities due to lack of assets or collateral.
Balikatan sa Kaunlaran (Partnership for Progress)
The objective of this program is to give more opportunities to Filipino families, especially women who want to achieve self-reliance through mentoring, self-help, training, and the provision of sustainable financial privileges, including unsecured loans.
One Town One Product (OTOP) Credit Facility
This is a promotional program of DTI and DBM that aims to showcase products and goods made in various cities, towns, and regions by providing enough funding for small businesses.
Sustainable Partnership for Eco-Enterprises Development (SPEED)
With a goal to harness the capacities of the marginalized sector in entrepreneurship, this program focuses on providing assistance to emerging community-based enterprises that promote eco-enterprise principles.
Eligible borrowers include private corporations, single proprietors, industry associations, NGOs, cooperatives, coop federations, and POs.
Space for Ingenious
Space for Ingenious was launched to give back to the startup community to help them grow their businesses through a three-pillar model – operation, network, and strategy.
To be considered for this grant, homegrown businesses need to have groundbreaking ideas.
Impact Hub Manila
This is a venture builder that focuses on supporting purpose-driven businesses with ideas that can change the lives of people positively.
It offers its members a one-of-a-kind ecosystem of collaboration, inspiration, and resources to help them thrive.
Brainsparks is one of the first ever founder-focused incubators in the country that aims to turn dreamers into founders.
This incubator is affiliated with industry experts, founders, and investors that can help startups founders find guidance or mentorship.
Through this, startup founders can build the mindset and principles they need to inspire growth.
This is a leading university-based technology business incubator that aids individuals to commercialize research projects, creative ideas, and inventions.
Animo Labs lends a helping hand to founders to build up business models, prototypes, and work plans.
They also give support to find investors and funding agencies, as well as assist with training and assessment.
Asian Institute Management – Dado Banatao Incubator
AIM-DBI is a hybrid DOST-PCIEERD incubator-accelerator program for entrepreneurs in all sectors. Its goal is to drive long-term inclusive growth in the country through technology, innovation, and entrepreneurship.
This way, they can give solutions to emerging world problems, create jobs, and distribute wealth in an equitable manner.
This s a tech business incubator and accelerator for early-stage and pre-seed startups across all verticals.
It invests in promising local and foreign startups so they can create a value proposition, innovate their current business models, and accelerate growth through various services.
Google for Startups – Southeast Asia
Google for Startups – Southeast Asia’s goal is to provide a three-month virtual accelerator program for high-potential seed to series A startups in tech who are driven to solve specific and technical challenges unique to the region.
This program is very exclusive to founders who are able to outline the specific issues faced by their startups.
This is a non-profit organization that runs founder-focused programs for early-stage tech founders who want to solve emerging market issues.
IdeaSpace Foundation believes that entrepreneurship, innovation, and technology are critical to the country’s long-term development and growth and startup founders play a massive role in shaping the future of the society.
Perfect for aspiring entrepreneurs who are looking for a co-founder, as well as early and mature startups with teams, this is a sector-agnostic organization that offers highly-structured programs to give entrepreneurs clarity on what their next steps should be.
The Founder Institute also gives feedback on key decisions and most importantly, a global network to support growth.
Eligibility Criteria for Business Grants in the Philippines
Here are the eligibility criteria for some of the top business grants and startup incubators in the Philippines.
Business type and size
The eligibility criteria for business grants and startup incubators in the Philippines vary depending on the specific program.
However, generally, these programs are available to businesses of varying sizes and business models, from small and micro-enterprises to larger corporations.
Industry or sector focus
Some grants are targeted toward specific sectors or industries, depending on who is granting it.
Other grants may require that the business is registered and operating in the Philippines or that it has been in operation for a certain period of time.
Financial stability and credit history
Many business grants and startup incubators require applicants to demonstrate financial stability and a good credit history.
In order to be eligible, entrepreneurs may need to provide financial statements, credit reports, or other documentation that prove their good financial standing.
Business experience and track record
Some business grants and startup incubators also require applicants to have relevant business experience and a track record of success.
This can be demonstrated through the submission of a business plan, references, or previous company performance data.
Compliance with government regulations and licenses
In addition to the aforementioned eligibility criteria, compliance with government regulations and licenses is also crucial in qualifying for business grants and startup incubators in the Philippines.
Applicants must ensure that they have all necessary permits and licenses to operate legally in their respective sectors.
This includes registering their business with the appropriate government agencies such as DTI and SEC, and obtaining necessary certifications.
Preparing for Grant Applications
In this section, we will explore how businesses can prepare for grant applications in the Philippines.
Step 1: Conducting research on suitable grants
First and foremost, businesses looking to apply for grants in the Philippines need to conduct thorough research on the available grants and startup incubators.
This means looking at the specific criteria for each grant and determining which ones are most suitable for their business type, size, and industry focus.
Step 2: Crafting a solid business plan
Once businesses have identified the most suitable grants and incubators to apply for, they should develop a solid business plan. Here’s what should be included in the business plan.
1. Market analysis
The market analysis section of the business plan should provide a detailed overview of the industry and sector that the business operates in, as well as the projection for the market in the years to come.
2. Competitive analysis
The competitive analysis section should outline the strengths and weaknesses of the business competitors, as well as opportunities and threats in the market.
3. Financial projections
This is crucial in preparing for grant applications. As much as possible, financial projections should provide a detailed breakdown of the business’s income, expenses, and cash flow projections for at least the next three years.
This information should be supported by financial statements and other documentation that show the business’s financial stability and credit history.
4. Marketing and sales strategies
The marketing and sales strategies section should outline how the business plans to reach and engage with its target customers, as well as how it plans to promote and sell its products or services.
5. Organizational structure and management
The organizational structure and management section of the business plan should list the company’s organizational structure.
Depending on the specific requirements of the grant, it should also include the team leaders and members, including the experience and qualifications of key personnel.
It should also explain the roles and responsibilities of each team member, as well as the company’s overall structure and hierarchy.
Step 3: Gathering necessary documents and requirements
In addition to creating a solid business plan, businesses should also gather all necessary documents and requirements before applying for grants or incubator programs in the Philippines.
This includes financial statements, credit reports, business registration documents, permits and licenses, and other relevant documentation.
How to Write a Compelling Grant Proposal
Writing a compelling grant proposal is essential in securing funding or admission to a startup incubator. Here are some tips on how to write a persuasive grant proposal.
Understanding the grant provider’s objectives and criteria
The first step in writing a compelling grant proposal is to thoroughly understand the objectives and criteria of the grant provider.
This includes researching the values and mission of the organization, as well as the specific goals of the grant program.
By understanding these factors, entrepreneurs can tailor their proposals to meet the expectations of the grant provider and increase their chances of success.
Presenting a clear and concise problem statement
The problem statement is the foundation of a grant proposal. It should clearly and concisely articulate the problem that the business is trying to solve or address.
This may involve identifying a gap in the market, addressing a societal need or challenge, or solving a specific problem faced by the industry or sector.
Outlining the proposed solution and its benefits
After presenting the problem statement, the grant proposal should outline the proposed solution and its benefits.
This section should clearly explain how the business plans to address the identified problem and the positive impact it will have on the industry, sector, or community.
It is essential to provide specific details on the proposed solution, including the technology, process, or product that will be used to address the problem.
Demonstrating the project’s feasibility and sustainability
Grant providers want to ensure that the projects they fund are not only feasible, but also sustainable in the long term.
This is why entrepreneurs should explain the project plan, budget, and timelines.
This includes outlining how the funding will be used, how the project will be managed, and how it will generate revenue and profits in the future.
Providing a detailed budget and timeline
The budget and timeline section of the grant proposal should provide a detailed breakdown of the financial resources required to undertake the proposed project, as well as a timeline of activities and milestones.
The budget should include all necessary expenses, including equipment, personnel, marketing, and other costs associated with implementing the proposed solution.
Submitting the grant application and follow-up
Once the grant proposal is complete, it is important to carefully review it for any errors or inconsistencies.
The proposal should then be submitted to the grant provider in a timely manner, along with all necessary documentation and requirements.
Ensuring compliance with submission guidelines
To ensure compliance with submission guidelines, entrepreneurs should carefully review the grant program’s application guidelines and requirements.
This includes deadlines, formatting requirements, and any specific documentation that must be submitted.
Failure to comply with these guidelines may result in disqualification from the grant program.
Following up on the application status
After some time of submitting the grant proposal, you may follow up on the application status.
This can involve reaching out to the grant provider to inquire about the timeline for reviewing applications, or to request feedback on the proposal.
Make sure to maintain a professional and courteous tone when following up, as this can help to build a positive relationship with the grant provider.
Preparing for potential interviews and presentations
If the grant provider expresses interest in the proposal, entrepreneurs should be prepared to attend interviews or make presentations to further showcase their project and answer any questions.
You may be tasked to pitch a deck, do a presentation, or provide additional documentation to support the proposal.
It is crucial to thoroughly research the grant provider and their expectations for these interactions in order to make a strong impression and increase the chances of securing funding or admission to the incubator program.
Managing and utilizing grant funds
Once funding has been secured, entrepreneurs need to carefully manage and utilize the grant funds to ensure the success and sustainability of the project.
This step involves creating a detailed budget and financial plan, as well as establishing processes for tracking expenses and ensuring accountability.
Entrepreneurs should also communicate regularly with the grant provider to give updates on the project’s progress and any challenges or opportunities that arise.
By effectively managing and utilizing the grant funds, entrepreneurs can maximize the positive impact of their project and increase their chances of securing additional funding in the future.
Adhering to grant terms and conditions
Adhering to grant terms and conditions is crucial for entrepreneurs who have secured funding.
These terms and conditions outline the expectations and obligations of the grant recipient and may include requirements such as regular reporting, meeting specific milestones, or using the funds for a specified purpose.
It is the task of entrepreneurs to carefully review and understand these terms and conditions, and ensure that all obligations are met in a timely and professional manner. Failure to adhere to the terms and conditions can result in the loss of funding.
Implementing the project as planned
With funding secured and grant terms and conditions understood, entrepreneurs must focus on implementing the project as planned.
This involves following the project plan and timeline, making adjustments as needed, and addressing any unforeseen challenges or obstacles that may arise.
Maintaining an open line of communication with team members, stakeholders, and the grant provider, sharing updates and progress reports is expected as the project moves forward.
Monitoring and evaluating project progress
As the project is implemented, entrepreneurs must monitor and evaluate its progress to ensure that it is meeting its objectives and achieving the desired impact.
This involves tracking key performance indicators (KPIs), analyzing data, and making adjustments as needed.
Reporting and communicating with the grant provider
Regular reporting and communication with the grant provider are vital throughout the project’s implementation and evaluation.
Business owners should provide timely and accurate reports that detail the project’s progress, challenges, and successes.
This may include financial reports that track expenses and revenue generated, as well as updates on any changes made to the project plan or timeline.
Entrepreneurs are also expected to respond promptly to any inquiries or requests for information. This can help to build a positive relationship with the grant provider and increase the chances of securing future funding or support.
Without question, securing grant funding can be a game changer for entrepreneurs looking to launch or scale their projects.
However, it requires a significant amount of planning, preparation, and ongoing effort to ensure the success and sustainability of the project.
From developing a strong proposal and adhering to submission guidelines, to effectively managing grant funds and monitoring project progress, you must remain focused, organized, and adaptable throughout the grant process.
By following the best practices listed above and learning from your experiences, you can increase your chances of securing grant funding and making a positive impact in your communities and beyond.
Thanks to grants, MSMEs can have the necessary financial support to bring their innovative ideas to life. In turn, this can foster economic growth and job creation, leading to a better quality of life for many.
That said, keep in mind that securing a grant is not the end goal. Rather, it is the beginning of a journey that requires hard work, dedication, and perseverance.
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