Professional Documents
Culture Documents
CAYAO, Roxan G.
MODESTO,Geraldine L.
May 2021
i
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
TABLE OF CONTENTS
Title Page i
Table of Contents ii
List of Tables iv
List of Figures v
List of Appendices vi
CHAPTER 1 INTRODUCTION
Introduction 01
Conceptual Framework 04
Theoretical Framework 05
Hypotheses 06
Definition of Terms 08
Foreign Literature 10
Local Literature 12
ii
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Foreign Studies 15
Local Studies 17
Synthesis 20
CHAPTER 3 METHODOLOGY
Research Design 21
Hypotheses Testing 23
Conclusions 35
Recommendations 36
References 37
Appendices 43
Curriculum Vitae 49
iii
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
LIST OF TABLES
iv
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
LIST OF FIGURES
1 Conceptual Paradigm 04
v
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
LIST OF APPENDICES
A Survey Questionnaire 43
B Grammarian’s Certification 47
C Statistician’s Certificate 48
vi
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CHAPTER 1
Introduction
Margaret James defines micro enterprises as to a small business that employs few people.
A micro enterprise usually operates with fewer than 10 people and is started with a small amount
of capital advanced from a bank or other organization. Most micro enterprises specialize in
providing goods or services for their local areas. It plays an important role in most economies,
particularly in developing countries. Micro enterprises account for the majority of businesses
worldwide and are important contributors to job creation and global economic development.
financing business activities through a combination of equities and liabilities. A firm can be fully
financed by shares or a mix of shares and debt. Equity financing happens when an investor puts
money or any assets into the business in exchange for a portion of ownership. Debt financing
happens when a business borrows money from a creditor or an outside source with the promise to
pay with interest. Debt financing enables people to do things which they think are impossible
because it is beyond their capabilities. On the other hand, it is risky because of the inconsistent
status of the business since they pay interest, the amount paid will exceed the amount borrowed.
1
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
The researchers aim to know the impact of long-term debt financing on the profitability of
micro enterprises, which is important because it will lead aspiring business owners to be
In this modern world, human involvement in the work field is decreasing. The advancement
of technology made work easier and faster so that it does not need labor from people. Even though
they still want to work, they do not have a chance because companies tend to dismiss employees
or there is no job available. This scenario can be related to what the researchers are currently
experiencing. In March 2020, some areas in the Philippines had undergone what the researchers
called “lockdown” which explains why most of the people were not able to go to school, work and
market. This pandemic is also the reason why most companies terminated some of their employees.
So, to survive, people are finding ways to earn to sustain their needs. They see business as an
alternative way to support themselves. At this point, the researchers observe that a lot of micro
enterprises are starting. Milk tea shops, online selling, snack bars, clothing brands, grocery stores,
and many more are the trending businesses of the year 2020.
The increase in numbers of businesses has an impact on the economy of Biñan City and
even other places. This contributes to creating more employment opportunities and
entrepreneurship skills. On the other hand, in the creditor's view, this could be a great opportunity
to lend money to those who want to start a business. Extending credit would be beneficial for them
2
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
since they will earn income from it. For those individuals who desire to have a business, they will
In starting a business, capital is a big factor to deal with. Not everyone has the capacity to
provide a large amount out of their own pocket. Limited access to finance is indeed a hindrance
that every aspiring business owner may encounter. Long-term debt like bank loans could be a great
individuals who are in doubt about where to get their capital because of the high cost of funding a
business. Clear out those doubts and turn them into opportunities. This can be a reason for them to
take the risk of establishing on their own. Therefore, this study sought to fill the curiosity of the
reader about starting a business at this point by critically examining the effect of long-term debt
financing on the financial performance of Micro Enterprises in Biñan City. The researchers cannot
deny the fact that businesses today are starting to make noise and it seems that it is possible to
This study aims to determine the impact of long-term debt financing on the profitability of
micro enterprises in Biñan City, Laguna. Specifically, the study seeks to answer the following
questions:
3
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
1.2. Years of establishment;
1.5. Industry
2. How can the perceived impact of long-term debt financing on the profitability of micro
2.1. Expansion
2.2. Advertisement
2.3. Productivity
3. Is there any significant difference on the perceived impact of long-term debt financing on
Conceptual Framework
INPUT
- Micro enterprises PROCESS
OUTPUT
- Number of - The researchers
- Impact of Long-
employees gather data they
Term Debt Financing
needed through
- Years of on the Profitability of
survey which are
establishment Micro Enterprises
useful to their study.
- Type of long-term
debt acquired
- Terms of long-term
debt acquired
- Industry
4
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Figure 1 shows how the researchers will conduct the study. They will look for businesses
that fit the criteria of being micro enterprises in the City of Biñan. Factors like number of
employees and asset range are beneficial data to begin with. By means of a survey, through asking
questions which are necessary, to the said demographic profile of the respondents, they will
Theoretical Framework
According to Modigliani and Miller (1958), the economists who proposed the trade-off
theory which states that capital structure is based on a trade-off between tax savings and distress
costs of debt. Within the trade-off theory, businesses seek optimal capital structure or the best mix
of debt and equity financing that maximizes a company’s market value while minimizing its cost
of capital.
According to Myers and Majluf (1984), who proposed the pecking order theory which
states that a company should prefer to finance itself internally though retained earnings. If this
source of financing is unavailable, a company should then finance itself through debt. Finally, and
as a last resort, a company should finance itself through the issuing of new equity.
Myers and Majluf proposal are the most relevant to the aims of this study, given the
emphasis that the sources of finance according to the hierarchy is first, preference is given to the
internal financing then to external sources when enough funds cannot be raised through internal
5
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Pecking order theory is important for this study because it can easily be applied to small
firms who are just starting their businesses since they do not have retained earnings yet, debt will
be their first source of funds. Debt has a cheaper cost than equity in terms of external funds so it
is better and appropriate to use for small and medium enterprises since they have low levels of
financial inclusion.
Hypothesis
The hypothesis has been formulated for this study and it will be tested at 0.05 level of
significance. They hypothesized that there is no significant difference on the perceived impact of
long-term debt financing on the profitability of micro enterprises when grouped according to
profile variables.
This study is conducted to determine the impacts of long-term debt financing on the
profitability in the City of Biñan, Laguna as perceived by the owners of micro enterprises during
the school year 2020-2021. The aspects looked into were the perceived impact of long-term debt
productivity.
within Biñan City, Laguna. The said area was chosen by the researchers because micro enterprises
started to boom in the city during the COVID19 pandemic. The study will be established
6
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
particularly at the end of first quarter. The possible hindrances that the researchers could encounter
while doing the study would be the limited access to data and lack of previous research that would
This part will discuss how the study would be beneficial to society and specific persons.
For aspiring business owners, this study will help them decide whether to get long-term
debt for the business they want to start. This decision matters since long-term debt is the best way
For business owners, this study will be helpful for them to reconsider if they need to get a
loan for the expansion and development of their business operations. They will benefit also
For the economy of Biñan City, Laguna, this study will be beneficial since every individual
has the ability to start their business, job opportunities will also open for the residents of the said
area. In this way, people will make money and this money will be used to buy goods. This will be
For lending institutions or creditors, this study will open opportunities for them. Since they
are going to earn income plus interest on the money that they are going to lend.
For future researchers, this study will serve as a guide for them in the future if they are
conducting a study related to the topic or if they want to continue what had been done by the
7
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Definition of Terms
The following terms are conceptually and operationally defined to give the readers a clear
Aspiring business owners. Those individuals who want to start their business and are
Bank loans. An amount of money borrowed for a set period within an agreed repayment
schedule. The repayment amount will depend on the size and duration of the loan and the rate of
interest. It is the easiest and most accessible way to get a long-term debt.
Capital. The capital of a business is the money it has available to pay for its day-to-day
Distress Cost. It refers to the expense that a firm in financial distress faces beyond the cost
Entrepreneurial Skills. They are known for embracing risk, having big ideas, and making
major innovations that change how others do business. While anyone who starts a business has a
bit of the entrepreneurial spirit, true entrepreneurs are distinguished by vision and transform our
collective quality of life. It is when an individual has the ability to turn the ideas on his or her mind
into actions.
Extending credit. Customers allow them to purchase goods and services on credit and pay
for them later on. When a creditor lends money and gains an income plus interest from it
afterwards.
8
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Financial performance. It is a subjective measure of how well a firm can use assets from
its primary mode of business and generate revenues. It is also the process of analyzing the financial
authorities that prevents people from leaving a given area. A full lockdown will mean that the
people in the given area must stay where they are and must not exit or enter a building or given
area. It is the time where people are not allowed to go out and are required to stay at home to be
safe.
Long-term debt financing. It involves multi-year repayment terms, while a short-term loan
gives a company quick access to capital -- sometimes even in as little as 24 hours. It is the type of
debt used by businesses as a source to fund their capital or other projects for the business.
Micro Enterprises. Usually operates with fewer than 10 people and is started with a small
amount of capital advanced from a bank or other organization. The owner himself or herself is a
manager also.
international boundaries and usually affecting a large number of people. It is when there is an
Trending Businesses. Businesses that are popular in the market at this point.
9
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CHAPTER 2
This chapter presents the related literature and studies both from foreign and local sources
which help in familiarizing ideas and information that are relevant to the present study.
Foreign Literature
Micro, small and medium-sized enterprises (MSMEs) go through many stages in their life
cycles, including start-up, growth, maturity, renewal/rebirth, and decline, and its financing
requirements differ depending on which stage they are in. While their proposal to use modern
fintech technology is useful for “start-up” companies, this Policy Brief mainly focused on the
“growth” and “renewal” phases. The report examined the credit and equity gap faced by micro,
small and medium-sized enterprises (MSMEs) and suggested ways that new technology and
creative business models can help MSMEs gain access to financial resources and fuel long-term
economic growth. The proposed initiatives aimed to: (1) boost conventional financing through the
use of digital technologies and big data; (2) expand funding options, including capital market
finance; and (3) improve financial institution consultation. (Koreen & Nemoto, 2019)
Micro, small and medium enterprises (MSMEs) are important for emerging markets'
economic and social growth. When MSMEs have access to capital, they are more likely to create
10
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
jobs and at a faster rate. However, in many developing countries, MSMEs access to financial
services are severely limited, limiting their ability to expand. Access to capital is one of the most
difficult obstacles faced by business owners and entrepreneurs, outranking energy shortages and
In some countries, macroeconomic changes and tightening credit conditions have begun to
affect MSME lending, according to the 2020 edition. Furthermore, the global coronavirus
(COVID-19) pandemic was having immediate and profound effects at the time of publication,
which would have an impact on a range of MSME finance indicators in the future. In contrast,
both new lending to MSMEs and the outstanding stock of MSME loans expanded only modestly
in 2018, with the median growth rate of these two measures dropping significantly. In 2018, the
share of MSMEs with loans went down in both medium- and high-income countries. In most
countries, the rapid increase from short-term to long-term MSME lending persisted in 2018, with
long maturities outnumbering short maturities. In 2018, more than half of all new MSME loans
had a maturity of more than one year, up from less than one out of every five in 2008.
(OECDiLibrary, 2020)
The capital structure of businesses was affected by the global financial crisis, with a
specific emphasis on privately owned businesses and small and medium-sized businesses (SMEs).
They used a broad dataset from 2004 to 2011 that included about 277,000 companies from 79
countries. The information was gathered through Bureau Van Dijk's ORBIS database. During a
downturn, debt maturity is expected to decrease as businesses and lenders adapt to increased
uncertainty, higher costs, and lower returns by greater risks and term premiums (in some instances,
lenders effectively cut off access to term finance), and banks restore or preserve their validity in
11
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
part by tightening lending standards. However, the reduced use of long-term financing as a result
may not be ideal, as it can lead to a decrease in productive fixed assets and lower productivity
These enterprises help people in underdeveloped countries improve their quality of life by
providing a product or service in their communities. Microbusinesses not only help business
owners enhance their quality of life, but they also bring value to the local economy. They have the
potential to increase purchasing power, increase income, and create jobs. Because the scope of the
operation is so narrow, the company may be unable to expand. Microbusinesses may also have
limited access to financial consultants and knowledge that might assist them better manage their
businesses due to their size and finances. They may be able to operate and provide income to
themselves and their employees, but they may not have the financial resources to expand.
Microenterprises can develop into more established small businesses and even larger corporations
in a variety of ways. If they have the financial means, one strategy is to buy several similar
businesses and merge them into a larger firm that works in numerous different areas. They argue
that the concept of microenterprises may lead to debt. Loans come with interest, which is often
expensive because the recipients may lack collateral or credit history, making repayment more
difficult. (James,2021)
Local Literature
A small business is one that is privately owned and operated and has a limited number of
employees and a low sales volume. Other measures used to identify small businesses, in addition
12
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
to the number of employees, include annual revenue (turnover), asset value, and net profit (balance
sheet), either separately or in combination. Smaller businesses, on the other hand, encounter
numerous problems as a result of their size, and owners must address these issues and create unique
solutions in order for their firm to survive and thrive. Small businesses have a difficult time raising
funds for expansion. Banks and lenders are lot more willing to lend money to a large company
with tangible assets that can be used as collateral, and banks and lenders are considerably more
ready to lend money to a large company with tangible assets that can be used as collateral. Larger
companies can also raise money by selling stock to the general public. However, there are already
several financing programs offered by the government, NGOs, and banks that caters especially to
Large companies may survive the present economic downturn, but the Philippines' micro,
small, and medium enterprises (MSMEs) are absorbing the majority of the financial blow.
According to the Philippine Statistics Authority's (PSA) most recent List of Establishments, the
country has 998,342 MSMEs, accounting for 99.52 percent of all local enterprises in 2018. The
absence of consumer demand puts firms' financial capacity to stay afloat, as well as their ability to
maintain their employees, to the test. Some SMEs are attempting to match today's demand pattern
by providing online and delivery services. To meet their financial obligations, however, fewer staff
is required. According to a CNN Philippines report, the government has allocated a P120 billion
loan guarantee plan and a P51 billion salary subsidy scheme for micro-businesses. This is done
through a low-interest lending program for small businesses run by the Department of Finance and
the Department of Trade and Industry. These could help business owners keep their financial
13
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Creating your own company can be thrilling: you become your own boss and, perhaps for
the first time in your life, you will be in charge of your own show. However, once your firm is up
and running, you may find that as it expands, you are overwhelmed with the various obstacles that
small businesses confront. Cash flow concerns, the problem of expanding a firm, and whether or
not to use cloud-based apps – these are all difficulties that small businesses face. Having access to
your financial and accounting data anywhere, at any time is one of the numerous advantages of
taking your financial and accounting data with you. The fourth frequent issue is tax complication,
MSMEs play a critical role in the Philippine economy, accounting for nearly two-thirds of
all businesses and nearly all employment. MSMEs generated over 5.7 million jobs in 2018.
Employees will not be paid or, worse, will lose their jobs if SMEs are unable to maintain their
operations. Millions of Filipinos' livelihoods are at risk, and their households may become
extremely vulnerable to hunger and poverty as a result. As a consequence, the recovery process
may be slowed, and more socioeconomic issues may arise. The International Labor Organization
(ILO) suggested that SMEs have greater access to financing and working capital to deal with their
short-term cash flow in order to withstand the COVID-19 crisis. This could take the form of grants,
The Development Bank of the Philippines (DBP) introduced the Sustainable Enterprises
for Economic Development (SEED). The bank aimed to use this program to increase MSMEs'
access to credit and speed up the credit process, as well as to bring MSMEs into the mainstream
of banking by introducing alternative forms of obtaining MSME financing help, expand the bank's
lending scope, and build jobs and income opportunities. In comparison to other programs on the
14
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
market, DBP's SEED program has a broader reach and scope, covering all sectors and special
segments. It has launched inclusive product propositions that are responsive to the demands and
Businesses can also be classified based on their employee count. Micro businesses have
fewer than ten employees, and small enterprises have between ten and ninety employees.
Foreign Studies
Decisions about a company's capital structure are critical to its performance. The right
balance of debt and equity in a company's capital structure will help it grow more profitably. Debt
enables businesses to do things they could not otherwise, but it also raises the company's overall
risk. This research revealed an important, but negative, connection between debt and profitability,
with the higher the debt, the lower the profitability. Due to the fact that debt tends to become more
expensive for various reasons, raising the proportion of debt in the capital structure would result
The capital structure decision appears to be consistent with the pecking-order theory: Dutch
SMEs use income to minimize debt levels, whereas increasing companies raise debt levels because
they need more funds. Profits are used by MSMEs to minimize debt because they prefer internal
funds to external funds. When a company grows, however, it raises its debt position because it
requires more capital, and our findings support the pecking-order theory. (Degryse et al., 2012)
15
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Internal equity is being used more often as the company grows. The significance of
providing collateral in reducing knowledge gaps and securing debt financing. The company owner
makes a significant contribution by putting up money and pledging personal properties as collateral
for business loans. When deferred earnings are reinvested, the positive relationship between the
usage of retained profits and the age and size of the company suggests that surviving companies
are becoming more dependent on internal equity. These contributions stressed the importance of
the firm owner's personal capital in MSME financing (Evans and Jovanovic, 1989), as well as the
importance of the firm owner's risk-taking ability in the financing decision. The use of long-term
debt funding is positively related to firm size and negatively related to firm age, according to the
Furthermore, the lack of a link between growth plans and employment is cause for concern,
since the country is heavily reliant on the MSME sector to generate much-needed jobs. This could
provide some useful insight into how South African entrepreneurs opted to expand their
enterprises. It's not surprising, then, that growth ambitions are more closely linked to sales and
asset growth, as entrepreneurs are known to judge their success primarily in terms of revenue
Micro, small and medium-sized businesses (MSMEs) are the engine that drives the entire
economy. People with financial motivations also engage in economic activities using their own
money, as well as loans, credit, and funds that they have already received or would have to receive
in the future to pay for them. People who start a company to make more money or gain wealth are
more likely to use their own money or repayable funds. (Staniewski et al., 2016)
16
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Local Studies
The borrower's ability to pay explains his or her ability to acquire debt financing. The
theory is that the greater a borrower's willingness to pay, the more options he has for debt funding
and obtaining bank capital. Meanwhile, the chance of acquiring bank loans is based on the
borrower's collateral, because if the borrower has appliances, business properties, and the ability
to pay by rent payment, as well as a disabled person in the family, his chances of obtaining bank
capital are greater than those who do not. These findings support the need for observable collateral
when obtaining bank capital or debt funding. The study also discovered that bank loans or debt
funding have a beneficial impact on total family income, total business revenue, total business
capital, and total business assets of entrepreneurs. Determining the Credit Risk Factors in
In terms of liquidity, operation, and leverage, MSMEs are in good shape. Overall, they are
in a great position to meet current commitments, turn receivables and inventories into cash
effectively, and fund their activities with credit. A strong linear relationship exists between
liquidity and operation, liquidity and leverage, and activity and leverage, according to the
correlation. The three success indicators, on the other hand, showed no correlation with
profitability. In contrast, the study showed that, despite having high scores on liquidity, leverage,
and most aspects of operations, MSMEs have low profitability. To optimize profit and the overall
value of their company, MSMEs should update their financial resource allocation strategies. Since
these MSMEs' main advantages have been liquidity, activity, and leverage, efforts should be
focused on increasing profitability. They should also recognize and evaluate the risks involved in
17
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
their revenue-generating operations. Since both liquidity and operation are linked to debt, these
businesses must rethink how the former will lead to a more optimal level of borrowing. These
enterprises should make use of borrowed funds and determine how best to arrange their capital
structures to optimize their worth. As a result, MSMEs will continue to play an important role in
the economy's development. Financial Performances of Micro, Small and Medium Enterprises
Several firm-level factors were identified in this study that can influence the attractiveness
of issuing corporate bonds as a funding choice versus obtaining bank loans. The greater the
company's debt leverage, the more likely it is to issue bonds, since the company's credit lines are
more likely to be exhausted. Furthermore, when deciding between the issuance of bonds or the
acquisition of bank loans, practitioners in the field suggested that the issuer determine the urgency
of the financing, the amount required, and the potential exposure of its credit. Bank loans have the
benefit of being able to provide financing almost immediately after approval, while bond issuance
is more expensive for small debts due to the administrative costs involved as well as the fact that
it takes longer. Corporate Debt Financing in the Philippines: Examining the Role of Firm-Level
Microbusinesses, without a question, play a crucial part in the growth of the economy.
Microenterprises, which account for the majority of the industry, contribute to reducing poverty
and unemployment. Micro Business expansion, on the other hand, remains a global challenge.
Even the availability of money, according to the report, has not resulted in the development of
microenterprises. When access to capital for investment is maximized, the mediating effect of
microfinancing could result in expansion. Lack of literacy and competitiveness are to blame for
18
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
the incapacity to use funds for expansion. Microbusinesses, on the other hand, do not maximize
their financial resources and instead rely on their own capital or interest-free borrowing. The use
of internal funding restricts the owners' ability to expand the company. Because the owner prefers
to use internal resources to avoid the risks of borrowing, he or she may acquire a survival mindset
Access to capital has remained one of the most important factors influencing MSME
competitiveness. The difficulties of MSMEs in accessing finance have been highlighted in studies
focusing on the development constraints faced by MSMEs in the Philippines. MSMEs, especially
smaller ones, have been unable to access funds despite the availability of funds for lending,
according to studies, due to their poor track record, limited appropriate collateral, and insufficient
financial statements and business plans. The lack of access to capital is cited as the most difficult
constraint to MSME growth in these studies. The issue does not seem to be a lack of funds available
for MSME lending, but rather the difficulty in obtaining these funds. Banks are allowed by law to
allocate 8% of their loan portfolios to MSME financing, so there should be enough funds for
MSME financing in principle. Government financial institutions, on the other hand, have their own
MSME funding schemes. Private banks, on the other hand, are wary of lending to MSMEs due to
their aversion to dealing with a large number of small accounts. Furthermore, many banks are also
unaware of the importance of small business lending. Micro, small and medium enterprises
19
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Synthesis
improving their quality of life. A small business is one that is privately owned and operated,
employs a small number of people, and has a low sales volume. They have the ability to boost
purchasing power, income, and employment. People who are highly motivated to start a business
are more likely to invest their money in order to increase their wealth. They use their money and
personal assets as collateral to obtain loans, which is necessary for debt financing.
Profits are applied when a business owner wishes to reduce their debt since some prefer
internal funding to external funding, but as the business grows, it will require more money, which
will need the acquisition of debt. Decisions on a company's financial structure are crucial to its
success, while debt allows businesses to achieve things they could not before, it also increases the
company's overall risk. To increase profitability, a company's debt and equity must be in balance,
20
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CHAPTER 3
METHODOLOGY
This chapter deals with the methodological procedures by which the data relevant to the
research problems have been collected. The methodology will include areas such as the research
design, population and sample, data gathering procedure, and hypothesis testing.
Research Design
The researchers will use the descriptive research method. To define the descriptive type of
research, Creswell (1994) stated that the descriptive method of research is to gather information
about the present existing condition. The emphasis is on describing rather than on judging or
interpreting. The aim of descriptive research is to verify formulated hypotheses that refer to the
present situation in order to elucidate it. The descriptive approach is quick and practical in terms
of the financial aspect. Moreover, this method allows a flexible approach, thus, when important
new issues and questions arise during the duration of the study, further investigation may be
deduced.
21
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
This study will focus on selected micro enterprises in Biñan City, Laguna. The researchers
will conduct a survey to a maximum of 30 owners of micro enterprises within Biñan City, Laguna
as their respondents. A set of questions will be asked to the respondents in order for the researchers
to gather sufficient data that will support their study. Since, every business owner represents his
or her business.
The researchers decided to use convenience sampling. Population is not necessary since
respondents are selected based on their availability. They have come up with 30 business owners
The researchers have chosen to do the research on the available participants since there is
a pandemic; the current situation becomes a hindrance for them. They cannot hold surveys at any
time since safety protocols are implemented. They have come up with 30 business owners as
respondents which are convenient and accessible since there are many micro enterprises.
The researchers will use convenience sampling, which is the easiest method of sampling.
This is done by simply selecting participants based on their willingness and availability to take
part. Useful results can be obtained, but the sample lacks clear generalizability or cannot represent
22
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
The researchers have gathered data through primary sources only. The researchers
collected the data by means of a survey that comprises the demographic profile of the respondents
in terms of the number of employees, years of establishment, type of long-term debt acquired,
terms of debt acquired, and industry it belongs to. The problems encountered by the respondents
will also be identified through the survey. After the respondents have answered the survey
Hypotheses Testing
The researchers used different hypothesis testing methods to come up with appropriate
findings to reconcile with the hypotheses established in chapter one of this study.
Relative Frequency This is the ratio of the number of times a value of the data occurs in
the set of all outcomes to the number of all outcomes. The researchers used it in the demographic
𝑓
𝑅𝑓 = 𝑥 100%
𝑛
Where:
23
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
n = total number of data
Weighted Mean. This is used to get the valuable information from each respondent in
relation to the Likert-scale questionnaire administered by the researcher. The result obtained from
using this formula helped the researchers obtained the necessary interpretations on the valuable
inputs needed to address the established problems. The formula is shown below (Blay, 2007):
𝑥1 𝑤1 + 𝑥2 𝑤2 + ⋯ 𝑥𝑛 (𝑤𝑛 )
𝑋̅𝑤 =
𝑤1 + 𝑤2 + ⋯ 𝑤𝑛
Where:
Interpretation:
1. The result would show where the data would fall under the table shown below. Furthermore,
the researchers would be able to come up with relevant information needed to formulate the
Range of Weighted
Interpretation
Mean
24
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
2.51 – 3.25 High
One-Way Analysis of Variance (ANOVA). This is used for three or more groups of data,
to gain information about the relationship between the dependent and independent variable. This
method is used to compare the significant different on the impact of long-term debt financing on
the profitability as perceived by selected micro enterprises. The procedural formulae are
∑𝑥 2
1. Total Sum of Squares: 𝑇𝑆𝑆 = ∑ 𝑥 2 − 𝑁
𝑆𝑆𝑏
𝑀𝑆𝑆𝑏 =
𝑑𝑓𝑏
𝑆𝑆𝑤
𝑀𝑆𝑆𝑤 =
𝑑𝑓𝑤
25
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
𝑀𝑆𝑆
9. F – Computed: 𝐹𝑐 = 𝑀𝑆𝑆 𝑏
𝑤
Where:
Interpretation:
1. When the computed F value is greater than the critical value of F at 0.05 level of
significance then, there is significant difference; however, when the critical value is higher
than the computed F-value then, there is no significant difference among the data
2. Moreover, when considering the p-value, when the value is less than 0.05 then the there is
significant difference, when the value is at least 0.05 then there is no significant difference.
26
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CHAPTER 4
This section summarizes the data that was collected and statistical analyses that were performed.
The goal of this section is to report the results without any type of subjective interpretation.
1.5. Industry
27
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Bank Debt 10 33.33 2
Type of long-
Mortgages 1 3.33 5
term debt
Debentures 4 13.33 3.5
acquired
Others 11 36.67 1
years of establishment, type of long-term debt acquired, terms of debt acquired, and industry. In
terms of number of employees 30 or 100% of the respondents answered less than 10 which ranked
first, none or 0 of the respondents answered 10-99 which ranked third, none or 0 of the respondents
answered 100-199 which ranked third also, and none or 0 of the respondents answered 200 and
above which ranked third. In terms of years of establishment 17 or 56.67% of the respondents
answered 1-2 years which ranked first, 5 or 16.67% of the respondents answered 3-7 years which
ranked third, and 8 or 26.67% of the respondents answered 8 years and above which ranked second.
In terms of type of long-term debt acquired 4 or 13.33% of the respondents answered bonds which
ranked third and a half, 10 or 33.33% of the respondents answered bank debt which ranked second,
1 or 3.33% of the respondents answered mortgages which ranked fifth, 4 or 13.33% of the
respondents answered debentures which ranked third and a half, and 11 or 36.67% of the
28
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
respondents answered others which ranked first. In terms of terms of debt acquired 21 or 70% of
the respondents answered 1-2 years which ranked first, 8 or 26.67% of the respondents answered
3-7 years which ranked second and 1 or 3.33% of the respondents answered 8 years and above
which ranked third. In terms of industry 17 or 56.67% of the respondents answered wholesale and
retail trade which ranked first, 7 or 23.33% of the respondents answered accommodation and food
services which ranked second, 3 or 10% of the respondents answered manufacturing which ranked
third, 1 or 3.33% of the respondents answered information and communication which ranked fifth,
1 or 3.33% of the respondents answered financial and insurance activity which ranked fifth, and 1
2. How can the perceived impact of long-term debt financing on the profitability of
2.1. Expansion
2.2. Advertisement
2.3. Productivity
Respondents
Weighted Verbal
Indicators Rank
Mean Interpretation
Expansion
1. Long term debt enables me to open
new branches in different locations. 2.97 High 3
2. Long term debt enables me to add new
products
and services to my current market. 3.23 High 2
29
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
3. Long term debt enables me to invest
with other non-competing businesses for
collaborations since funds are needed for
us to promote each other's product and
services. 2.63 High 4
4. Long-term debt enables me to have
enough funds for my target new customer
markets. 3.33 Very High 1
Summative Mean 3.04 High
Advertisement
1. Long term debt enables me to use
social media platforms to connect with
my audience since it requires payments
to boost my business. 2.87 High 2
2. Long term debt enables me to use
physically printed media, such as
magazines and newspapers,
to reach consumers. 2.60 High 3
3. Long term debt enables me to include
incentives like coupons, temporary price
reductions, promotional gifts or
giveaways for my customers purchase. 3.03 High 1
4. Long term debt enables me to
coordinate with famous personalities or
celebrities to advertise our product,
lending their names or images to promote
us. 2.23 Low 4
Summative Mean 2.68 High
Productivity
1. Long term debt enables me to purchase
the right tools and equipment for the
business. 3.13 High 2
2. Long term debt enables me to have a
training program for my staff to ensure
that they develop their effectiveness. 2.97 High 3
3. Long term debt enables me to improve
the workplace conditions by investing in
the physical environment. 3.27 Very High 1
4. Long term debt enables me to hire new
employees. 2.63 High 4
Summative Mean 3.00 High
Overall Summative Mean 2.91 High
30
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Table 2 shows the respondents Perceived Impact of Long-Term Debt Financing on the
Profitability in terms of expansion. The number 4 which states that “Long-term debt enables me
to have enough funds for my target new customer markets” had a weighted mean of 3.33, verbal
interpretation of Very High and ranked first. The number 2 which states that “Long term debt
enables me to add new products and services to my current market” had a weighted mean of 3.23,
verbal interpretation of High and ranked second. The number 1 which states that “Long term debt
enables me to open new branches in different locations” had a weighted mean of 2.97, verbal
interpretation of High and ranked third. The last number is 3 which states that “Long term debt
enables me to invest with other non-competing businesses for collaborations since funds are
needed for us to promote each other's product and services” had a weighted mean of 2.63, verbal
interpretation of High and last in the rank. Shows the respondents Perceived Impact of Long-Term
Debt Financing on the Profitability in terms of advertisement. The number 3 which states that
“Long term debt enables me to include incentives like coupons, temporary price reductions,
promotional gifts or giveaways for my customers purchase” had a weighted mean of 3.03, verbal
interpretation of High and ranked first. The number 1 which states that “Long term debt enables
me to use social media platforms to connect with my audience since it requires payments to boost
my business” had a weighted mean of 2.87, verbal interpretation of High and ranked second. The
number 2 which states that “Long term debt enables me to use physically printed media, such as
magazines and newspapers, to reach consumers” had a weighted mean of 2.60, verbal
interpretation of High and ranked third. The last number is 4 which states that “Long term debt
enables me to coordinate with famous personalities or celebrities to advertise our product, lending
their names or images to promote us” had a weighted mean of 2.23, verbal interpretation of Low
31
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
and ranked fourth. Shows the respondents Perceived Impact of Long-Term Debt Financing on the
Profitability in terms of productivity. The number 3 which states that “Long term debt enables me
to improve the workplace conditions by investing in the physical environment” had a weighted
mean of 3.27, verbal interpretation of Very High and ranked first. The number 1 which states that
“Long term debt enables me to purchase the right tools and equipment for the business” had a
weighted mean of 3.13, verbal interpretation of High and ranked second. The number 2 which
states that “Long term debt enables me to have a training program for my staff to ensure that they
develop their effectiveness” had a weighted mean of 2.97, verbal interpretation of High and ranked
third. The number 4 which states that “Long term debt enables me to hire new employees” had a
profile variables?
32
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
difference
𝑥4= 2.875 𝑥4= 2.875 𝑥4= 3.188 exists
𝑥5= 2.841 𝑥5= 2.500 𝑥5= 2.705
𝑓= . 580 𝑓= 2.184 𝑓= . 777
𝑝= . 680 𝑝= . 100 𝑝= . 551
Table 3 shows that with p-value of .022 which is less than the level of significance .05, the
researchers reject the null hypothesis stating that there is significant difference on the impact of
long term-debt in terms of expansion when grouped according to years of establishment. It shows
that business that are established 3-7 years (with mean=3.600) are more affected than those
businesses that are established 8 years and above (with mean=2.563). Significant difference also
exists in the impact of long-term debt in terms of advertisement with p=.004. It shows that business
established 1-2 years (with mean=2.971) than those business that are established years and above
(with mean=2.683). However, with p=1.04, there is no significant difference on the productivity
when grouped according to years of establishment. With p-value of .680 which is greater than the
33
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
level of significance .05, the researchers accept the null hypothesis stating that there is no
significant difference on the impact of long term-debt in terms of expansion when grouped
according to type of long-term debt. There is also no significant difference exist in the impact of
long term-debt in terms of advertisement with p=.100 and in terms of productivity with p=.551
when grouped according to type of long-term debt. With p-value of .004 which is less than the
level of significance .05, the researchers reject the null hypothesis stating that there is significant
difference on the impact of long-term debt in terms of expansion when grouped according to terms
of long-term debt. It shows that business that have 3-7 years term of long-term debt (with mean =
3.313) are more affected than those business that have 8 years and above term of long-term debt
(with mean = 1.000). However, with p=.203, there is no significant difference on the advertisement
when grouped according to terms of long-term debt. Significant difference also does not exist on
the productivity when grouped according to terms of long-term debt with p=.154. With p-value of
.803 which is greater than the level of significance .05, the researchers accept the null hypothesis
stating that there is no significant difference on the impact of long-term debt in terms of expansion
when grouped according to industry. Also, there is no significant difference exist on the impact of
long term-debt in terms of advertisement with p=.471 and in terms of productivity with p=.631
34
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CHAPTER 5
Conclusions
This research is about the impact of long-term debt financing on the profitability of micro
owners of micro enterprises in Biñan City, Laguna. As mentioned in the background of the study,
this study sought to fill the curiosity of the reader about starting a business at this point by
examining the effect of long-term debt financing on the financial performance of micro business.
The following conclusions can be drawn from that (1) Majority of the respondents answered
less than 10 in terms of number of employees, 1-2 years in terms of years of establishment, others
in terms of type of long-term debt acquired, 1-2 years in terms of terms of long-term debt acquired,
and wholesale and retail trade in terms of industry, (2) Respondents have high Perceived Impact
and productivity, (3) The results showed that there is no significant difference on the perceived
impact of long-term debt financing on the profitability in terms of advertisement and productivity
when grouped according to type of long-term debt acquired and the industry it belongs. But there
35
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
is a significant difference in terms of expansion when grouped according to years of establishment
Recommendations
Based on the conclusion, the following were recommended: ln order to help the respondents
of this study which are the business owners, all the aspiring business owners, and future
researchers: (1) If the business needs a large amount of money to expand, a long-term loan is a
good option. It will help you to have a low monthly payment, (2) The longer the business is
established, it will help the business to get a long-term loan easier with a good track record or
credibility that the business can pay on time, (3) Use long-term debt to invest on machineries and
employees to increase productivity in the long run, (4) Starting a business is not easy it needs funds
or capital. Acquiring long-term debt as a source of capital is a good option. Since it has low interest
rates, (5) Future researchers may conduct another study regarding this topic when things are back
to normal and there is no pandemic anymore, to know if there will be a difference on the result,
(6) Future researchers may do an in-depth exploration regarding this topic but on other cities
present in Laguna, (7) Future researchers may also conduct further studies that may support the
36
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
REFERENCES
Adair, P., & Adaskou, M. (2015). Trade-off-theory vs. pecking order theory and the
determinants of corporate leverage: Evidence from a panel data analysis upon French SMEs
https://www.tandfonline.com/doi/full/10.1080/23322039.2015.1006477
Angeles, I., Calara, M., & de Guzman, A. (2019). The mediating effect of microfinancing
on access to finance and growth of microenterprises: evidence from the Philippines. Retrieved
from: https://journal-jger.springeropen.com/articles/10.1186/s40497-019-0150-x
Alarcon, D., Perez, J., & Umali, MA. (2017). Determining the Credit Risk Factors in
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.dlsu.edu.ph/wp-
content/uploads/2019/03/5perez-
072617.pdf&ved=2ahUKEwjV5dyJ2YfwAhXndt4KHe03D3sQFjAFegQICBAC&usg=AOvVa
w3y9ZuIkMPSAcX22uGhf3dn
https://www.econstor.eu/bitstream/10419/126881/1/pidsdps1205.pdf
Blay, B. (2007). Elementary Statistics. Manila: Anvil Publishing, Inc. CFI. (n.d.). What is
37
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
https://corporatefinanceinstitute.com/resources/knowledge/other/nominal-
data/#:~:text=For%20nominal%20data%2C%20hypothesis%20testing,frequency%20of%20the
%20given%20values
https://elijahclark.com/trade-off-and-pecking-order-theories/
Crisanto, JM. (2018). Mainstreaming small and medium enterprises into the Philippines’
articles/mainstreaming-small-and-medium-enterprises-into-the-philippines%E2%80%99-formal-
financial-system
Degryse, H., de Goeij, P., & Kappert, P. (2012). The impact of firm and industry
characteristics on small firms’ capital structure. Small Business Economics, 38(4), 431-447.
https://www.who.int/bulletin/volumes/89/7/11088815/en/#:~:text=A%20pandemic%20is%20def
ined%20as,are%20not%20considered%20pandemics
Doyle, A. (2020). Important Skills Entrepreneurs Need with Examples. Retrieved from:
https://www.thebalancecareers.com/list-of-skills-entrepreneurs-need-2062391
https://ep.franphil.com/common-problems-of-small-scale-
businesses/?fbclid=IwAR1XBQ0VQUyhnXhfq1B_W_Y3FdolsBUORhfpgFEdFFssFofCq9QQ
w4pGjmM
38
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Flaminiano, JP. (2020). How will small businesses survive in this crisis? Retrieved from:
https://www.cnnphilippines.com/life/culture/business-life/2020/4/17/SME-business-
pandemic.html
Habib, H., Khan, F., & Wazir, M. (2016). Impact of debt on profitability of firms: Evidence
https://www.investopedia.com/terms/c/capital.asp
https://www.ifc.org/wps/wcm/connect/Industry_EXT_Content/IFC_External_Corporate_Site/Fin
ancial+Institutions/Priorities/SME+Finance
https://www.investopedia.com/terms/m/microenterprise.asp
https://www.investopedia.com/terms/d/distress-cost.asp
https://www.investopedia.com/terms/f/financialperformance.asp
Koreen, M., & Nemoto, N. (2019). Digital Innovation Can Improve Financial Access for
improve-financial-access-for-smes/
https://www.investopedia.com/terms/s/smallandmidsizeenterprises.asp
39
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Mac an Bhaird, C., & Lucey, B. (2010). Determinants of capital structure in Irish SMEs.
6-pdf/
https://www.thestreet.com/personal-finance/debt-financing-14913324
Modi N. (2020). What is lockdown meaning and what to expect from it. Retrieved from:
https://www.businessinsider.in/india/news/what-is-lockdown-and-what-to-expect-from-the-
lockdown/articleshow/74759615.cms
Narvas, JM. (2020). 5 Challenges Faced by Small Businesses and How to Solve Them.
and-how-to-solve-them?fbclid=IwAR3ZI7y9yJ04OQa-
7ScXp1vQOqsJwelELSK59MCtPCGRWctb4iUnnHjBLPY
Neneh, B. N., & Vanzyl, J. (2014). Growth intention and its impact on business growth
amongst SMEs in South Africa. Mediterranean Journal of Social Sciences, 5(20), 172. Retrieved
from: https://www.mcser.org/journal/index.php/mjss/article/viewFile/3722/3647
en/index.html?itemId=/content/publication/061fe03d-en
https://www.tutor2u.net/busin ess/reference/sources-of-finance-bank-loans
40
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Romagos, C. P. E., Almenar, K. Q., Singson, A. F. T., & Sio, M. J. S. (2012). Corporate
Debt Financing in the Philippines: Examining the Role of Firm-Level Factors through Binary
Choice Model. Journal of International Business Research, 11(3), 105. Retrieved from:
https://d1wqtxts1xzle7.cloudfront.net/61814982/000002220200117-79935-
hcyuel.pdf?1579278656=&response-content-
disposition=inline%3B+filename%3DJOURNAL_OF_INTERNATIONAL_BUSINESS_RESE
AR.pdf&Expires=1620835190&Signature=RbU9GYTDGDHWitLgSUJQ~HK1VS6XJ3p1PQE
ckW8swGJKwmKn0wtcp-fM3RNrrxjImiCThBPpZzN~~-
hGFtgVVztPsBOikMKXYMXBov1ZSTaGAgjHV0qkWHkjfVBLk3o~xPzP8eQ~s2by77kEvC8
ZAlBm2FQff1T425SZ7oXcAzp1BEVCohpyiLS6PmuLadzE57mrblE0gD2jLtYt4HhPu3vLZhK
UU1znlrb64Em7wRiLEdGgbSp017h0~ua5oDFv4t~UltAF-irOnXBYvwezXZpTUWK2LH-
YbG7fL-jQowYJ4RoJrMiC6uRjnljiDG1ZJDb3WoS73muvZcxYNWkrig__&Key-Pair-
Id=APKAJLOHF5GGSLRBV4ZA#page=111
Salonga, R. (2020). Monetary Struggles of Small and Start-Up Businesses. Retrieved from:
https://sciencepark.com.ph/blog/covid-businesses-philippines/?fbclid=IwAR0gcQeKI-
lNkOSG6ELbHd1ibK35UPknPhrxRpO5hSD7jMuQv2ai03obGVg
Staniewski, M. W., Szopiński, T., & Awruk, K. (2016). Setting up a business and funding
Shelton C. (2019). Extending Credit to Your Customers: A Primer for Small Business
41
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
Tarver, E. (2020). Which Financial Principles Help Companies Choose Capital Structure?
pecking-order-play-greater-role-capital-budgeting.asp
https://www.wallstreetmojo.com/pecking-order-theory/
Tressel, T., Demirguc-kunt, A., & Peria, MS. (2015). The impact of the global financial
https://blogs.worldbank.org/allaboutfinance/impact-global-financial-crisis-use-long-term-finance
https://businesstips.ph/small-businesses-in-the-philippines/
42
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
APPENDIX A
SURVEY QUESTIONNAIRE
4. What is the term for payment of the long-term debt that you acquired?
Activity ☐ Others
6. Does acquiring long-term debt made your business more profitable in terms of:
Strongly Strongly
43
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
A. EXPANSION
locations.
to my current market.
B. ADVERTISEMENT
44
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
since it requires payments to
boost my business.
newspapers, to reach
consumers.
purchase.
personalities or celebrities to
promote us.
C. PRODUCTIVITY
45
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
9) Long term debt enables me to
physical environment.
46
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
APPENDIX B
GRAMMARIAN’S CERTIFICATION
This is to certify that the undersigned has carefully reviewed the study
entitled “The Impact of Long-Term Debt Financing on the Profitability of Micro
Enterprises in Biñan City, Laguna” developed by Roxan G. Cayao, Geraldine L.
Modesto, and Anica Joy D. Ogama; with the set of structural rules that govern the
composition of sentences, phrases, and words in the English language. Also, all
corrections and recommendations made have been done and/or incorporated in the
final manuscript.
Issued this 4th day of October, in the year of our Lord, two thousand and
twenty-one.
Signed
47
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
APPENDIX C
STATISTICIAN’S CERTIFICATE
This is to certify that the thesis entitled The Impact of Long-Term Debt
Financing on the Profitability of Micro Enterprises in Biñan City, Laguna.
Prepared by:
Cayao, Roxan G.
Modesto, Geraldine L.
Ogama, Anica Joy D.
Has undergone careful statistical analysis and has been reviewed by the
undersigned.
Signed in the 4th of October in the year of our Lord 2021 at Biñan City, Laguna.
Signed
48
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
CURRICULUM VITAE
PERSONAL INFORMATION:
EDUCATIONAL BACKGROUND:
49
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
PERSONAL INFORMATION:
EDUCATIONAL BACKGROUND:
50
SAN PEDRO COLLEGE OF BUSINESS ADMINISTRATION
Km. 30 Old National Highway, Brgy. Nueva, San
KnPedro City, Laguna
PERSONAL INFORMATION:
EDUCATIONAL BACKGROUND:
51