I.

INTRODUCTION

Money is very important in starting up any kind of business may it be small or big.

Money is used as a fund or a capital. One major reason why small businesses fail is because the

owner lacked necessary funds. Money is needed for equipments, property and more essentials for

your small business. You may wonder how you can raise the money needed to start your small

business.

Money Lending Company is very important for a person or company not only in

Philippines but also globally. Money Lending Company allows the person or company to lend

money to use at any necessary needs but in return they have to pay for it plus its strain.

Lending (also known as "financing") in its most general sense is the temporary giving of

money or property to another person with the expectation that it will be repaid. In a business and

financial context, lending includes many different types of commercial loans. Lending and

borrowing are the same transactions from the two viewpoints. Lending to a business (particularly

to a new startup business) is risky, which is why lenders charge higher interest rates and often

they don't give small business loans. Lenders do not participate in your business in the same

way as shareholders in a corporation or owners/partners in other business forms. In other words,

a lender has no ownership in your business. Lenders have a different kind of risk from business

owners/shareholders. Lenders come before owners in terms of payments if the business can't pay

its bills or goes bankrupt. That means that you must pay lenders back before you and other

owners receive any money in a bankruptcy.

Even in hard economic conditions, people and enterprises go for loans to be able to pay

for the purchase of real estate and other transactions, which in turn make the lending business a
recession-proof business. But before going into the micro lending and mortgage business, you

need to know the contours and crannies of this large industry. Microcredit, or the practice of

providing very small loans to the poor, often with group liability, is an increasingly common tool

intended to fight poverty and promote economic growth. But micro lending has expanded and

evolved into what might be called its “second generation,” often looking more like traditional

retail or small business lending where for-profit lenders extend individual liability credit in

increasingly urban and competitive settings. The motivation for the continued expansion of

microcredit is the presumption that expanding credit access is an efficient way to fight poverty

and promote growth. Yet, despite optimistic claims about the effects of microcredit on borrowers

and their businesses, there is relatively little empirical evidence on its impact.

It doesn’t take a finance degree to know that the current economy is tough.

Unemployment rates are still at an all-time high, and many companies have gone bankrupt, while

others are barely hanging on by a thread. In fact, in today’s ever-changing and fluxing economic

climate, business loans are about the only option small business owners have for obtaining cash

to further their companies. With an efficient business loan, almost any enterprise can see

immediate growth as long as they use the additional capital wisely.

Business loans are taken out for several reasons. A company may want to secure

financing to maintain business operations, invest in equipment, start a new branch, or any

number of other motivations. Not only are these loans beneficial for burgeoning businesses, but

they are normally easy to obtain as there are a multitude of lenders who willing to partner with

business owners with a credit score of 720 or higher, a stable income, and a decent business plan.

However the biggest advantage of taking out a business loan during tough economic times is that

companies can use it to increase their working capital. While companies that are looking to
expand often already have enough money to become larger, taking out a loan allows them to

maintain their operating cash flow, making it easier for them to cover any unexpected expenses.

Thus, they are able to make payments on their loan by using the new income gained from

expanding their business. Ultimately, all business owners should evaluate their wants and needs

before contacting a lender. This allows the business owner to see which type of lender is the best

fit for their company. Similarly, it is crucial that business owners take the time to read the all of

the terms and conditions accompanying any business loan they are considering. There are often

early repayment penalties associated with a loan and it is important to obtain a business loan that

does not incorporate these penalties, as prepaying a loan in full can save a business a large

amount of money in interest.

 II. EXECUTIVE SUMMARY

Located in Passi City, Iloilo also known as “The Sweet City at the Heart of Panay”, the

proponents are conducting this study to determine whether or not a lending business which aim

to help small and medium enterprises and at the same time make profit through operations, is

feasible and beneficial to both residents and businessmen in the area, as well as for the company

owners.

Money Care Lending, Inc. is owned by group of friends who decided to venture in a

Lending/Financing business. The business will be located at Perfecto St., Passi City, Iloilo. This

aims to help the people in Passi City and other neighboring municipality such as Duenas,

Calinog and San Enrique. Money Care Lending offers Real Estate and Business Loans in a very

low interest. Businessmen in a small and medium scale enterprise who wish to have additional

income for expansion will be the target market of the business. It only requires collateral for

them to be able to qualify for a loan. Money Care Lending, Inc. accepts collateral such as

Our Vision Statement

Our vision is to build loan services brand which will become the lead choice for individuals,

smaller and medium businesses. Our vision shows our zeal, values, integrity, security, service,

excellence and teamwork.

Our Mission Statement

Our mission is to provide professional, reliable and trusted microloan services that assist

individuals, start – ups, and non-profit organizations in achieving their goals with little or no
stress We will build our business to become one of the leading firms in the micro loan services

line of business in the Island of Panay.

Location Map

SCOPE OF THE STUDY

The future market- small and medium enterprise, individual and interested home owners and

government and private employees.

The future competitors – this includes the currently established lending institutions available in

the locality

The guidelines and implementing rules in establishing a lending business.

OBJECTIVES OF THE STUDY

To be able to identify the effectiveness of the proposed project in the market by catering

financial needs.

To be able to formulate the most effective management techniques in operating the business.

To find out if the business would be feasible in the market

To be able to find effective strategies of increasing profit of the business while underrating the

cost.

Definitions of Terms

Add on Interest - a method of charging interest. Interest payable is determined at the beginning

of a loan. In add on method interest, interest amount is added on the total amount borrowed and

added on to the principal of a debt. Then each payment is deducted from the total amount.

Borrower - a person or organization that takes out a loan from a bank under an agreement to pay

it back later, typically with interest.

Co-maker - Person who, with other individual(s), guarantees a financial commitment (such as

repayment of a loan). He or she is jointly and severally liable, with the other signatories (co-

makers), for honoring the commitment in full. Also called co-guarantor.

Collateral - something pledged as security for repayment of a loan, to be forfeited in the event of

a default.

Interest Rate - the proportion of a loan that is charged as interest to the borrower, typically

expressed as an annual percentage of the loan outstanding.

Late Payment Charges - A late payment fee (a late charge) is charged to a borrower who

misses paying at least their minimum payment by the payment deadline. In order to avoid late

fees, ensure that you pay at least the minimum amount by the due date.

Lender - A lender is an individual, a public or private group, or a financial institution that makes

funds available to another with the expectation that the funds will be repaid.
Lending - the action of allowing a person or organization the use of a sum of money under an

agreement to pay it back later.

Lending Company - A lending company is a public or private organization that grants

funds to borrowers with the intention of being repaid at an arranged interval.

Loan Sharks - a moneylender who charges extremely high rates of interest, typically under

illegal conditions.

Loans - a thing that is borrowed, especially a sum of money that is expected to be paid back with

interest.

Memorandum of Agreement - A Memorandum of Agreement (“MOA”), also known as

a memorandum of understanding, is a formal business document used to outline an agreement

made between two separate entities, groups or individuals. A MOA usually precedes a more

detailed contract or agreement between the parties.

Micro Lending - Microlending involves granting very small loans to people in need. These

loans are generally used by entrepreneurial people wanting to start a business, or those who need

extra cash to expand. Micro lending is unique because of the motivation behind it, the size of

loans, and the people involved.

Processing fee - A charge that passes on costs to the borrowers for obtaining documentation,

appraisals, employment and credit history, or any other information necessary for the lender's

underwriting department. It acts as a "catch all" fee for miscellaneous required items that are not

large enough to itemize by themselves.

Promissory Note - a signed document containing a written promise to pay a stated sum to a

specified person or the bearer at a specified date or on demand.

Term – period over which a loan agreement is in force, and before or at the end of which loan

should either be repaid or negotiated for another term.