BUSINESS AND

FINANCE

ABM12 - DIVINA
 TOPIC : QUARTER 3

Loan Requirements
of
Bank and Nonbank
Institutions
 TOPIC REVIEW - True or False
TRUE OR FALSE

1. Cash budget is a budget that provides the number of units that should
be produced over a given period of time.

2. Production budget can be computed using the formula, Expected

sales plus Target ending inventory minus Beginning inventory.

3. One of the most important type of budget in financial planning is

cash budget because most of its contents are found in the financial
statements particularly sales and expenses.
 Am I familiar? Who own the slogan?

1. 2. 3.
___________________ ___________________________ _______________________
“We Find Ways”
“You’re in Good hands “Make the Best Happen”
 Quarter 3 TOPIC

BANK AND NONBANK LOAN REQUIREMENTS

D-1

BANK LOAN REQUIREMENTS

 Quarter 3

D-1
Learning competency:
compare and contrast the loan requirements of
the different banks and nonbank institutions and
cite these institutions in the locality
(ABM_BF12- IIIe-f-14).
Day 1: Bank loan Requirements
LEARNING OBJECTIVES:

K: Determine bank loan requirements

and procedures;
S: Distinguished the loan requirements
and procedures of different banking
institutions ; and
A: Appreciate the importance of loan
requirements of different banking
institutions .
Activity 1: Read and comprehend.
Activity notebook, choose the letter only. What I know!
(5mins)

1. What is an agreement between the borrower and the bank

that the loan will be paid back in a specific amount of time at
a specific interest rate?
A. Bank Loan
B. Checking account
C. Savings account
D. Stock market
2. Which of the following about open-end loan is
true?
A. An automobile is probably the most common
type of open-end loan;
B. The longer you use the money, the more you
pay
C. The amount owed is fixed
D. The term is fixed
3. It shows the willingness of the borrower
to repay the loan.
A. Capacity
B. Collateral
C. Capital
D. Character
4. It is the most liquid asset.
A. Cash
B. Inventory
C. Accounts receivable
D. equipment
5. This explains how much credit you are
able to handle.
A. Collateral
B. Capital
C. Capacity
D. Character
ANSWERS.

1. A. Bank Loan
2. D. Character
3. A. Cash
4. A. Cash
5. C. Capacity
ACTIVITY 2 DISCUSSION - ABSTRACTION

INSTRUCTIONS: 1. CLASS WILL BE DIVIDED INTO 2 GROUPS;

2. EACH GROUP WILL CHOOSE A
REPRESENTATIVES TO ANSWER THE QUESTIONS;
3. DEFINITIONS WILL BE PROVIDED TO EACH GROUP.
A REPRESENTATIVE WILL POST IT TO THE BOARD
CORRESPONDING TO THE CORRECT ANSWER
THEY CHOOSE.
 DISCUSSION - ABSTRACTION 20mins

Banking Institution - Banking Institution also referred to as a universal

or commercial bank can range from a large financial institution with a
highly visible brand name and an international presence to a small
organization with a local presence. A banking institution’s financing
activities generally involve various types of lending, such as corporate
finance, housing, project finance, retail, short-term finance, small-
medium enterprises, trade, and others. Alternatively, the focus of a
banking institution may be only on specific transactions with clients that
meet certain requirements and within certain industry sectors. Banking
institutions may also provide financial products with a focus on
environmental business opportunities.
Financial institutions - otherwise known as
banking institutions, are corporations that
provide services as intermediaries of
financial markets.
three major types of financial institutions
1. Depository institutions – deposit-taking institutions that
accept and manage deposits and
make loans, including banks, building societies, credit unions,
trust companies,
and mortgage loan companies;
2. Contractual institutions – insurance companies and pension
funds
3. Investment institutions – investment banks, underwriters,
brokerage firms.
 FINANCIAL INSTITUTIONS - 2 CATEGORY ACCORDING TO
OWNERSHIP
1. Commercial Banks - A commercial bank is
where most people do their banking. Commercial
banks make money by providing and earning
interest from loans such as mortgages, auto loans,
business loans, and personal loans. Customer
deposits provide banks with the capital to make
these loans.
FINANCIAL INSTITUTIONS - 2 CATEGORY ACCORDING TO OWNERSHIP

2. Cooperative Banks - A Cooperative Bank is one

organized for the primary purpose of providing a wide
range of financial services to cooperatives and their
members. It shall be organized only by cooperative
organizations that are duly established and registered
under the Philippine Cooperative Code of 2008 (R.A.
No. 9520)
 EXAMPLES OF BANKING/FINANCIAL INSTITUTIONS

BDO Unibank, Inc.

Metropolitan Bank and Trust Company BANCO COOPERATIVE DE ZAMBOANGA
(Metrobank) Capitol Drive, San Jose
Bank of the Philippine Islands (BPI) Balanga City, Bataan
Land Bank of the Philippines CONSOLIDATED COOPERATIVE BANK
Philippine National Bank (PNB) CBDS Building, Ramon Magsaysay St
Barangay Zone 3, Digos City, Davao del Sur
Security Bank Corporation (Security Bank)
COOPERATIVE BANK OF CEBU
China Banking Corporation (Chinabank)
EXAMPLES OF BANKING INSTITUTIONSM. Velez St.
Development Bank of the Philippines
Guadalupe, Cebu City 6000
(DBP) Cooperative Bank of Negros Oriental
Union Bank of the Philippines, Inc. CBNO Building, Libertad St., Poblacion 8,
(Unionbank) Dumaguete City, 6200 Negros Oriental,
Rizal Commercial Banking Corporation Philippines
(RCBC)
East West Banking Corporation (EastWest
Bank)

COMMERCIAL BANKS COOPERATIVE

BANKS
 BANK LOAN - REQUIREMENTS
BANK LOAN:
It is the extension of money from a bank to another
party with the agreement that the money will be repaid.
Nearly all bank loans are made at interest, meaning
borrowers pay a certain percentage of the principal amount
to the lender as compensation for borrowing. Most loans also
have a maturity date, by which time the borrower must have
repaid the loan. A bank loan occasionally is called a bank
advance.

https://financial-dictionary.thefreedictionary.com/bank+loan
 BANK LOAN - REQUIREMENTS
1. Purpose of Loan
While some lenders don’t have usage restrictions, most will want to know how
you plan to spend it. For instance, some businesses experience resistance from
banks when they apply for a loan to reduce existing debt.
In comparison, banks usually approve of businesses using loans for the following
reasons:
• Improve Cash Flow • Purchase Inventory
• Purchase Equipment • Use as Payroll
• Pay for Expansion Projects
 BANK LOAN - REQUIREMENTS
2. Business Experience
When reviewing your loan application, banks will
consider how much experience you have. If you’ve
owned your business for years, and have managed your
finances responsibly, this will be in your favor. In
comparison, if you’ve recently opened your business, or
have struggled financially, this could be detrimental.
 BANK LOAN - REQUIREMENTS
3. Business Plan
When applying for a bank loan, you might be asked to
submit your business plan. It might seem tedious, but
your business plan can help the bank determine the
right loan amount and term for you.
 BANK LOAN - REQUIREMENTS
4. Credit History
When considering your business for a loan, a bank will
conduct a credit check. They’ll do this to determine your
personal and business credit scores. Personal credit history
especially matters for businesses that operate as proprietors
or partnerships. In both cases, the business owner assumes
partial or full financial responsibility for the company.
 BANK LOAN - REQUIREMENTS
5. Personal Information
Even though you’ll be borrowing money for your business, some
personal information could affect your ability to qualify. As we
mentioned in the previous section, your personal credit score will
affect your eligibility. In addition, banks usually also request the
following personal
information in your application:
• Addresses
• Tax returns
• Criminal record • Financial statements
• Information on your education • Assets
• Personal Loan Balances
 BANK LOAN - REQUIREMENTS
6. Financial Statements
In addition to personal financial information, you’ll also
need to submit your business’s financial statements. The
amount of statements will vary depending on the bank
you’re applying to. Most banks will require a balance sheet,
profit and loss statements, cash flow statements, income
statements, and other financial projections. In addition, they
may want to see your business’s bank account balances.
 BANK LOAN - REQUIREMENTS
7. Collateral
Even if y our business or personal credit history falls below
bank loan requirements, you could still receive financing by
submitting collateral. Banks define collateral as business or
personal property that you put up to guarantee the repayment
of a loan. Other forms of collateral include automobiles,
expensive jewelry, and high-end antiques. The expected
useful life of your collateral must match the lifespan of the
business loan.
 BANK LOAN - REQUIREMENTS
8. Cash Flow
The primary financial concern for banks when it comes to
accepting applicants involves business cash flow. In other
words, does your business generate enough cash flow to
repay a bank loan on-time? To determine this, the bank will
ask you to present information about your primary business
cash sources. Most banks understand that managing cash
flow is a common challenge for business owners, especially
entrepreneurs that own seasonal businesses.
BANK LOAN - REQUIREMENTS

TABLE 1: LOAN REQUIREMENT AND PROCESS

BANK LOAN - REQUIREMENTS

TABLE 1: LOAN REQUIREMENT AND PROCESS

 BANK LOAN - REQUIREMENTS
List of Requirements (Bank of the Philippine Island)

For Employed 1. Valid Philippine government-issued, photo-bearing ID with

signature
2. Latest 3 months payslips, or latest Income Tax Return (ITR) BIR
Form 2316
For Self-employed
1. Valid Philippine government-issued, photo-bearing ID with
signature
2. Audited Financial Statements (3 years), or latest Income Tax
Return
3. DTI/SEC Business Registration Certificate
 BANK LOAN - REQUIREMENTS Form
BDO Personal Loan Eligibility Requirements
• Must be 21 years old at time of application but not more than 60 years old upon loan maturity
• Applicant must be a Filipino citizen or a foreigner who is a resident of the Philippines
• Minimum Gross Fixed Annual Income Requirement:
◦ P15,000 for Salaried Employees
◦ P35,000 for Self-Employed / Professionals
• Regular employee or self-employed with business operating at least two (2) years
• One (1) landline number in either residence or place of work, or mobile number (postpaid or
prepaid)
• Residence or office address must be within any area where a BDO branch is located
 BANK LOAN - REQUIREMENTS
Eastwest Personal Loan Requirements
You must be a Filipino citizen;
You must be at least 21 years of age;
You must have a landline number and a mobile number;
Your salary must at least be 15,000 pesos per month.

Documents:
1. Application form
2. Valid ID’s
3. ITR or Payslip
4. Proof of residency
 Developing Mastery
Instructions: 1. Class will be divided into 2 groups, each group will
choose a leader but all member should participate
5 mins during the activity.
2. Each group will be given a box with answers inside.
Posted on theboard are the possible answers, but
before answering, a representative will perform the
consequence first then post the answer then
followed by another reporesentative and so on ...
3. Eight questions to be anwered.
4. Consequence will be prepared by the teacher.
 Activity 3

ANSWERS
BUSINESS EXPERIENCE PURPOSE OF LOAN

BUSINESS PLAN CREDIT HISTORY

PRSONAL INFORMATION FINANCIAL STATEMENT

COLLATERAL CASH FLOW

PRACTICAL APPLICATION INDIVIDUAL ACTVITY
INSTRUCTIONS:
1. 1 WHOLE A4 BOND PAPER
2. WRITE LIGIBLY. EXPLAIN THE IMPORTANCE OF EACH
LOAN REQUIREMENTS (CHOOSE ON 5)
3. 10 MINUTES RUBRICS:
CONTENT: 10
PTS
IDEAS: 10 PTS
ORGANIZATION: 5 PTS
 Activity 4: BANK LOAN REQUIREMENTS
10mins
CHOOSE 5

BUSINESS EXPERIENCE PURPOSE OF LOAN

BUSINESS PLAN CREDIT HISTORY

PRSONAL INFORMATION FINANCIAL STATEMENT

COLLATERAL CASH FLOW

 GENERALIZATION
Banking institutions, often known as universal or commercial
banks, can range from a huge financial institution with a well-known
brand name and an international presence to a tiny organization with a
local presence. Corporate finance, housing, project finance, retail, short-
term finance, small-medium companies, commerce, and other forms of
loans are typical of a financial institution's financing activities.
Alternatively, a financial institution's concentration may be limited to
certain transactions with clients that satisfy specified standards and fall
within specific industrial sectors. Banking institutions may also provide
financial solutions with an emphasis on environmental business
potential.
 Activity 5 : EVALUATION
Activity Notebook: 5mins

1. Give atleast 3 commercial and 3 cooperative banks

operationg in the Philippines.
2. Enumerate the 8 loan requirements to be complied
when applying for a business loan.
 ASSIGNMENT

To be submitted in a 1/4 sheet of paper : list

down 5 non bank financial institutions actively
operating in Negros Oriental.
DAY 2
 QUARTER 3 - TOPIC

Loan Requirements
of
Bank and Nonbank
Institutions
 TOPIC REVIEW
1. WHAT ARE THE TWO MAJOR CATEGORIES OF BANK ACCORDING TO OWNERSHIP?
_________________________ ______________________________

2. Otherwise known as banking institutions, are corporations that provide services as

intermediaries of financial markets. __________________________

3. includes the name or business name, birthdate, address, SSS no., TIN no., phone no.,
and other identifying information such as valid government-issued identification
cards. _______________________
1. COMMERCIAL, COOPERATIVE
2. FINANCIAL INSTITUTIONS
3. DEMOGRAPHIC
 What
does
these
ACTIVITY
1 3 MINS
images
emplie
s?
TOPIC: DAY 2
NON BANK
INSTITUTIONS
 O
L
E
B K: Identify non bank loan requirements;
J
A E
S: Distinguished the loan requirements and procedures of
R C different banking institutions ; and
N
I
T A: Appreciate the importance of loan requirements of
I
N V
different non banking institutions .
G E
S
 ORAL PARTICIPATION: A LIST OF FINANCIAL INSTITUTIONS
ACTIVIT WILL BE FLASHED ON THE SCREEN; LEARNERS WILL HEAR A
Y2 MUSIC AND INSTRUCTED TO PASS THE OBJECT GIVEN BY THE
5MINS TEACHER COUNTER CLOCKWISE. ONCE THE MUSIC WILL
STOP PASSING OF THE OBJECT WILL STOP AS WELL..
LEARNER WHO HAS THE OBJECT WILL ANSWER THE
WHAT QUESTION BEING FLASHED.
TO BE FLASHED ON SCREEN
I 1. PERPETUAL HELP CREDIT COOPERATIVE INC. (PHCCI
KNOW? 2. DUMAGUETE CITY CREDIT COOPERATIVE (DCCO)C
2. SECURITY BANK
3. PALAWAN PANSHOP
4. ASA PHILIPPINES FOUNDATION, INC. (A MICROFINANCE NGO)
WHA
T
IS
IT!
20
Nonbank Institutions
MINS
 Nonbank Institutions
WHA A non-banking financial institution (NBFI) or non-bank financial company
T (NBFC) is a financial institution that does not have a full banking license or is
not supervised by a national or international banking regulatory agency. NBFC
IS facilitate bank-related financial services, such as investment, risk pooling,
IT! contractual savings, and market brokering. Examples of these include
insurance firms, pawn shops, cashier's check issuers, check cashing locations,
payday lending, currency exchanges, and microloan organizations. The role of
NBFIs in strengthening an economy, as they provide "multiple alternatives to
transform an economy's savings into capital investment which act as backup
facilities should the primary form of intermediation fail.
 1. Risk pooling institutions
WHA
T Insurance companies underwrite economic risks associated with
death, illness, damage to or loss of property, and other risk of
IS loss. They provide a contingent promise of economic protection
IT! in the case of loss. There are two main types of insurance
companies: life insurance and general insurance. General
insurance tends to be short-term, while life insurance is a longer
contract, ending at the death of the insured. Both types of
insurance, life and property, are available to all sectors of the
community.
 2. Contractual savings institutions

WHA
T Contractual savings institutions (also called institutional
investors) provide the opportunity for individuals to invest in
IS collective investment vehicles in a fiduciary rather than a principle
IT! role. Collective investment vehicles invest the pooled resources of
the individuals and firms into numerous equity, debt, and derivatives
promises.
Contractual savings institutions include national provident
funds, life insurance companies, private pension funds, and funded
social pension insurance systems.
 3. Other nonbank financial institutions
WHA
T
o Venture capitalists
IS
o Currency exchanges
IT!
o Microloan organizations (ASA, CARD INC,
KATIPUNAN)
o Pawnshops. (PALAWAN, CEBUANA.,)
 4. Government Non-Bank Financial
Institutions
WHA
T As the banking system was evolving there was a parallel development of the other
financial institutions. Insurance for workers under the Government Service Insurance
IS System was in operation by 1936. Compulsory social security insurance in the private sector
was founded in 1957 with the creation of the Social Security System. These institutions
IT! were created essentially to protect the welfare of employees. The consequence was that they
set up large funds that were generated from the insurance premium of members and their
counterpart institutions. A logical result was the corresponding effort to administer the
welfare programs to protect the insurance funds that are generated.Among these are
institutions like PAG-IBIG fund. In conjunction with the promotion of housing, the
government also created the National Home Mortgage Financing Corporation which is
designed as a national mortgage bank that could refinance the mortgage papers of other
financial institutions.
 Component Institutions
WHA
T
1. Investment Houses. These are stock corporations engaged in the underwriting of
IS securities of other corporations on a guaranteed basis. Their principal role is capital
IT! formation that can engage in portfolio management, stockbrokerage, financial consultancy
and lending operations. As it applies to the US financial system, the investment banking
industry is part of the larger securities sector. It is basically made up of firms engaged in
issuing, distributing and selling securities and related financial products. Investment banks,
brokerages and market- making entities comprise the securities sector. Investment banks are
global financial institutions which perform any
or all of the service functions of origination and issue, management, underwriting and
distribution.
WHA
T 2. Financing Companies. Organized for the purpose of extending credit
IS facilities to consumers and to industrial, commercial, or agricultural
enterprises. They operate by discounting or factoring commercial papers
IT! or accounts receivables, or by buying and selling contracts, leases,
chattel mortgages, or other evidences of indebtedness, or by leasing motor
vehicles, heavy equipment and industrial machinery, business and office
machines and equipment, appliances, and other movable properties.
WHA
T 3. Investment Companies. Any issuer which the Commission,
IS upon application by such issuer, finds and by order declares to
IT! be primarily engaged in a business or businesses other than that
of investing, reinvesting, or trading in securities either directly
or (A) through majority-owned subsidiaries or (B) through
controlled companies conducting similar types of business.
WHA
T 4. Securities Dealers and Brokers. A securities dealer
IS buys and sells shares of stock of another or acquires
IT! securities for profit. In contrast, a securities broker
facilitates transaction between a buyer and seller of
securities for a commission
WHA
T 5. Venture Capital Corporations. These are organized
IS jointly by private banks, the National Development
IT! Corporation and the Technology Livelihood Research
Center and/or other government agencies to develop,
promote, and assist small and medium scale enterprises
through debt to equity financing.
WHA
6. Pawnshops. Provide credit to small borrowers who are not
T qualified to obtain small loans from other financial institutions.
IS Cost of borrowing and terms of payment are generally fair
IT! making it as one of the components of the country’s financial
system that plays a vital role in socio_x0002_economic
development. Compared with banks, pawnshops do not impose
as many documentary requirements before releasing cash to
customers. Moreover, the latter are more accessible, as they
may be found even in remote areas where banks do not operate.
WHA
T 7. Lending Investors. Lending investors
IS are those who make a practice of lending
IT! money for themselves or others. They
extend all types of loans, generally short
term, often without collateral, using their
own capital.
WHA 8. Mutual Building and Loan Associations. These are
T corporations whose capital stock
IS must be subscribed by the stockholders in regular equal
installments with the purpose of
IT! accumulating the stockholders’ savings and repaying them with
their accumulated savings and profits upon surrender of their
shares in order to encourage industry, savings, and home
building
among its stockholders.
 SAMPLE APPLICATION FORM
WHA
T PHCCI LOAN
IS REQUIREMENT

IT! 1. Filled-out application loan form

2. Membership (full-fledged) of at
least 6 months
1 3. Proof of identification
4. Proof of income
5. Co-makers
WHA
T
IS
IT!

2.
3
 INSTRUCTIONS:
1. COPY AND ANSWER IN YOUR ACTIVITY NOTEBOOK
ACTIVITY 2. IDENTIFY WHAT TYPE OF FINANCIAL NON BANK FINANCIAL INSTITUTION LISTED BELOW.
3 MARK CHECK ON THE COLUMN CORRESPONDING TO YOUR ANSWER.
PAWNSHOP MICROLOAN LENDNG GOV.
ORG INVESTMENT NONBANK
LET’S FINANCIAL
TRY INST.
IT! 1. DCCO
2. LIL’S
LENDING
5 MINS 3. CEBUANA
4. ASA PHILS.
5. SSS
6.DUNGGAN
ON
 INDIVIDUAL ACTIVITY: A4 BONDP PAPER
ACTIVITY Choose one bank, one credit cooperative and nonbank financial institution.
3
NAME OF LOAN APPLICATION LOAN APPLICATION COMPARE/
INSTITUTION REQUIREMENTS PROCESS CONTRAST
WHAT BANK
I
CAN CREDIT
COPERATIVE
DO?
NON BANK
10
MINS
 OUTSTANDING
(20pts)
Appropriateness: Fulfills or
ACTIVITY exceeds all of the assigned
R content requirements.
3 U Accuracy: Knowledge of
the subject is accurate
B throughout.
R Extensiveness: Exhibits
WHAT I
convincing range and quality
of knowledge, having done
EFFECTIVE ADEQUATE (10 INEFFECTIVE
(15pts) pts)
(5pts)
Appropriateness: Appropriateness: Fulfills Appropriateness: Fails to
some of the important
Fulfills the important
content requirements of content requirements of
address the important
requirements of the
the assignment. the assignment.
Accuracy: Knowledge
assignment.
Accuracy: Knowledge
Accuracy: Knowledge of
of the subject is accurate of the subject is the subject is generally
throughout except in generally accurate, inaccurate.
minor details. though flawed. Extensiveness: Knowledge
Extensiveness: Seems
informed on the subject,
Extensiveness: Exhibits
limited range or quality
of the subject lacks range
or quality.

I
having done appropriate of knowledge, having Perspective: The
C appropriate research, if research, if done minimal information presented
applicable. appropriate research, if
S applicable. reveals failure to
CAN Perspective: The
information presented
Perspective: The
information presented
applicable.
Perspective: The
information presented
understand the concept.

reveals understanding of
DO? reveals the understanding of
the concept. the concept
reveals partial
understanding of the
concept.

10
MINS
G
E
N
E A non bank financial institution (NBFI) is a financial institution that
R lacks a full banking license and is thus unable to take public deposits.
A However, NBFIs do help to encourage alternative financial services
L including investing (both collective and individual), risk pooling,
I financial advising, brokering, money transfer, and check cashing. NBFIs
Z are a source of consumer financing (along with licensed banks).
A Insurance companies, venture capitalists, money exchanges, some
T microloan groups, and pawn shops are a few examples of non bank
I financial institutions. These non-bank financial organizations compete
O with banks, offer services that aren't always well suited for banks, and
N focus on certain industries or demographics.
 A. Modified Matching Type: Classify the following and write the correct answer in the correct
column.
ACTIVITY Purpose of Loan Personal Information Pawn Shops
Microloan Organizations Investment Insurance Firms
3 Depository Contractual Collateral

WHAT
BANK NON BANK LOAN REQUIREMENT
I
HAVE 1 4 7
2 5 8
LEARNED 3 6 9
?

10
MINS