Last Updated On May 2025
In the Philippines, small and medium enterprises (SMEs) and manufacturing businesses are the backbone of the economy. From family-run shops to large-scale processors, these businesses are responsible for over 99% of all registered enterprises in the country. Yet, despite their size and impact, many still face the same challenge: how to access the right capital to grow.
Enter working capital.
Working capital is one of the most understood yet underutilized financial tools available to businesses today. For Filipino entrepreneurs wanting to grow their businesses, using working capital wisely is very important. It can helpimprove cash flow and take advantage of good opportunities. This knowledge can make the difference between staying still and achieving lasting growth.
In this article, we’ll break down:
What working capital is and why it matters
How it fuels business growth
Tips and tricks to use it wisely
How to choose the right financing partner
Common myths and mistakes to avoid
How to boost your next loan application
Key takeaways for long-term success
Working capital is the money a business has available for its day-to-day operations. It’s calculated as:
Current Assets – Current Liabilities = Working Capital
It covers things like payroll, supplier payments, rent, utilities, and short-term expenses. It’s the cash cushion that keeps your business moving, especially when customers haven’t paid yet, or when a new opportunity arises unexpectedly.
Many entrepreneurs mistakenly think of working capital as “extra funds,” but in reality, it’s essential. Without it, businesses may struggle to pay vendors, miss out on discounts, or fail to deliver on orders.
For example, a manufacturing business with limited working capital might delay production due to raw material shortages. On the other hand, one with healthy capital can buy in bulk, negotiate better terms, and deliver faster—giving them a competitive edge.
Here in the Philippines, business cycles often include:
Late customer payments
Seasonality in sales
Fluctuating costs of raw materials
Longer procurement or logistics timelines
All of these create a cash flow gap. That’s where working capital comes in—it allows you to bridge those gaps, ensuring you can maintain operations without needing to dip into emergency savings or use high-interest credit cards.
A few examples:
A local food manufacturer uses working capital to buy ingredients in bulk, reducing cost per unit.
A printing business invests in extra paper stock before a major campaign season.
A clothing retailer restocks fast-moving items ahead of holiday demand.
When used intentionally, working capital isn’t just a buffer—it’s a growth engine. Here’s how Filipino business owners can maximize it:
Buy in bulk, avoid stockouts, and reduce holding costs. Investing in a basic inventory system helps manage stock levels and forecast demand better.
Tip: Monitor your balance sheets to see how much working capital is tied to inventory—and free it up when needed.
Use a term loan or working capital loan to grow your operations without dipping into cash reserves. This could mean:
Opening a new branch
Hiring additional staff
Investing in new production equipment
Tip: Choose loan terms that align with your expected ROI. If the project pays off in 2 years, don’t settle for a short repayment period.
With funds ready, you can:
Pay upfront and secure discounts
Order in higher volumes
Build better long-term relationships with vendors
Tip: Create a separate bank account to manage payments and discounts for better financial visibility.
Working capital gives you flexibility to experiment. Try launching a new product line, testing a pop-up shop, or running a marketing campaign.
Tip: Use your business bank’s analytics or reports to track spending and measure ROI per test.
Digital tools make operations faster, smarter, and more cost-efficient. Use capital to:
Upgrade your POS system
Launch an online store
Automate your accounting and payroll
Tip: Many of these tools are tax-deductible and improve long-term efficiency.
Looking to secure your space instead of renting? Working capital can help you:
Make a down payment
Cover renovation costs
Fund initial relocation or setup
Tip: Pair working capital with a longer-term business loan for strategic asset growth.
Capital isn’t just for growth—it’s also an opportunity to tighten your finances. Review your:
Operating expenses
Supplier contracts
Existing loan application documents
Payment terms with vendors
Tip: Keeping your books in order improves your profile with financial institutions and lending companies in the Philippines.
Let’s clear up some common misconceptions:
Not always. Non-bank financial institutions like Esquire Financing Inc. often provide unsecured business loans.
Platforms like SeekCap and lenders like Esquire offer some of the fastest loan approval processes in the country.
In reality, many of the most successful companies use financing to maintain momentum and fuel expansion.
While convenient, credit cards often come with higher interest rates and stricter limits—making them less ideal for business needs.
Not all lenders are created equal. Here’s what to look for:
Experience with your industry (e.g., manufacturing business, services, logistics)
Loan terms that align with your goals
Fast and transparent application process
Supportive relationship, not just transactional
Esquire Financing, for example, offers customized business loans of up to ₱100 million—backed by years of experience working with Filipino entrepreneurs across industries.
With offices in commercial hubs like the Savya Financial Center, they provide both accessibility and a human approach to financing.
Here’s how to increase your chances of approval:
Keep your balance sheets and income statements updated
Maintain a clean bank account history
Clarify the purpose of your loan (expansion, inventory, etc.)
Choose a type of business structure (sole proprietorship, corporation) that matches your growth plan
Demonstrate how the loan will strengthen your business operations
As a non-bank financial institution, Esquire Financing Inc. goes beyond the numbers. Their focus is on empowering entrepreneurs—not just funding them.
Unlike traditional banks, Esquire provides:
Tailored financing solutions
High loan limits (up to ₱100M)
Flexible repayment terms
Support across all business stages
Whether you're a startup or a second-generation enterprise, their services are built around your long-term growth.
Thanks to platforms like SeekCap, applying for a business loan has never been easier. Entrepreneurs can now compare offers, track approvals, and manage documents—all online.
These platforms also connect you with lenders like First Circle, Asialink Finance Corporation, and Esquire, giving you more options based on your credit profile and loan needs.
Scaling a business in the Philippines doesn’t have to feel overwhelming. With the right tools, mindset, and financial support, you can:
Strengthen your supply chain
Expand your footprint
Improve customer satisfaction
Increase profitability
Whether you’re in the manufacturing industry, services, or retail, working capital can be the bridge between where you are now—and where you’re meant to go.
Working capital is critical for daily operations and long-term expansion.
Smart strategies help improve inventory, efficiency, and the bottom line.
Choose financing partners like Esquire Financing Inc. for tailored support.
Platforms like SeekCap simplify the loan application process.
Avoid relying on credit cards for large business expenses.
Always align your capital strategy with your growth goals and business cycle.
Ready to scale with purpose?
Explore flexible financing options with Esquire—and take your business to the next level.
