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A lending business is regulated by the SEC, not just your city. Under RA 9474, a lending company can only be a corporation, needs at least ₱1,000,000 paid-in capital, must be majority Filipino-owned, and needs an SEC authority to operate before lending. The mistake owners make is starting as a sole proprietor. That setup cannot hold a lending company authority.[1]
Why a DTI registration is not enough
RA 9474 says a lending company shall be established only as a corporation, and no lending company may do business without an authority to operate from the SEC. That rules out the DTI business name route on the Permit Path for this business.[1]
See our guides to SEC registration and choosing a business structure.
The order that works
Raise the capital, form the corporation, then apply for the certificate of authority. Only then apply for local permits and BIR registration, since your city may ask for proof of SEC authority.
The law sets ₱1,000,000 as the minimum paid-in capital and lets the SEC prescribe more. Check the current SEC amount before you set your capital.[1]
Rules that apply to every loan
Loan agreements must comply with the Truth in Lending Act and the Consumer Act.[1]
In practice, every borrower should get a written statement of all charges before signing. Keep a copy of each signed disclosure with the loan file.
Before you lend your first peso
- Confirm with the SEC whether higher capital applies to you
- Line up Filipino majority shareholders
- Prepare articles of incorporation stating lending as the purpose
- Draft a loan disclosure form that lists every charge
- Set up a loan register and borrower files
- Wait for the SEC certificate of authority before lending
Questions people ask
- What happens if I lend without SEC authority?
- The law sets a fine of ₱10,000 to ₱50,000 and/or 6 months to 10 years imprisonment.
- Can a foreigner own a lending company?
- At least a majority of the voting capital stock must be owned by Philippine citizens.
- Is an online lending app covered by the same rules?
- The SEC has separate rules for online lending platforms that we have not covered yet. Check them before launching an app.
Sources
Checked 13 November 2026. We link the agency's own page for every requirement. Rules change; confirm with the office before you pay.
- Republic Act No. 9474 (Lending Company Regulation Act of 2007) · Congress of the Philippines (via Lawphil) · 22 May 2007
The extra permits, in one table
| Permit or registration | Agency | When it applies | Fee |
|---|---|---|---|
| Incorporation as a corporation (sole proprietorships/partnerships not allowed)[1] | SEC | always | Not published |
| Certificate of Authority to operate as a lending company[1] | SEC | always | Not published |
| Minimum paid-in capital[1] | SEC | always (SEC may prescribe a higher amount) | Not published |
| Filipino majority ownership[1] | SEC | always | Not published |
| Truth in Lending Act / Consumer Act compliance on loan charges[1] | SEC | always | Not published |
| Penalty for lending without SEC authority[1] | SEC | if operating without authority | fine PHP 10,000 to PHP 50,000 and/or 6 months to 10 years imprisonment |