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Business Finance – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 5: Loan Requirements of Bank and Nonbank Institutions
First Edition, 2020

Republic Act 8293, section 176 states that: No copyright shall subsist in any work
of the Government of the Philippines. However, prior approval of the government agency or
office wherein the work is created shall be necessary for exploitation of such work for profit.
Such agency or office may, among other things, impose as a condition the payment of
royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this module are owned by their respective copyright holders.
Every effort has been exerted to locate and seek permission to use these materials from
their respective copyright owners. The publisher and authors do not represent nor claim
ownership over them.

Published by the Department of Education, Division of Palawan

Schools Division Superintendent:
Natividad P. Bayubay, CESO VI
Assistant Schools Division Superintendents:
Loida Palay-Adornado, Ph.D.
Felix M. Pamaran

Development Team of the Module

Writers: Avis Zyra C. Yumang
Content Editors: Richelle A. Macasilhig
Mark G. Javillonar
Language Editor: Marianne R. Valdez
Reviewers: Eric N. Quillip
Layout Artist: Mark G. Javillonar
Management Team: Aurelia B. Marquez
Rodgie S. Demalinao
Eric N. Quillip

Printed in the Philippines by ________________________

Department of Education – MIMAROPA Region – Schools Division of Palawan

Office Address: PEO Road, Bgy. Bancao-Bancao, Puerto Princesa City

Telephone: (048) 433-6392
E-mail Address: palawan@deped.gov.ph
Website: www.depedpalawan.com

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 12

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
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Introductory Message
For the facilitator:

Welcome to the Business Finance – Grade 12 Modular Distance Learning (MDL)

Self-Learning Module on the Loan Requirements of Bank and Nonbank Institutions!

This module was collaboratively designed, developed and reviewed by educators

from public institution to assist you, the teacher or facilitator in helping the
learners meet the standards set by the K to 12 Curriculum Most Essential Learning
Competencies (MELCs) in the “New Normal” situation while overcoming their
personal, social, and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st century skills while taking into consideration
their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of
the module:

Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.

As a facilitator, you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.

iv
For the learner:

Welcome to the Business Finance – Grade 12 Modular Distance Learning (MDL)

Self-Learning Module on the Loan Requirements of Bank and Nonbank Institutions!

This module was designed to provide you with fun and meaningful opportunities
for guided and independent learning at your own pace and time. You will be
enabled to process the contents of the learning resource while being an active
learner.

This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways; a story, a
song, a poem, a problem opener, an activity
or a situation.

What is It This section provides a brief discussion of

the lesson. This aims to help you discover
and understand new concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled in to process
what you learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or
skill into real life situations or concerns.

Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.

v
 Additional Activities In this portion, another activity will be given
to you to enrich your knowledge or skill of
the lesson learned.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in

developing this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of
the module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your
answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.

We hope that through this material, you will experience meaningful learning
and gain deep understanding of the relevant competencies. You can do it!

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 What I Need to Know

This module was designed and written with you in mind. It is here to help you cite
bank and nonbank financial institutions in the locality and master the loan
requirements of these financial institutions. The scope of this module permits it to
be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the
standard sequence of the course. But the order in which you read them can be
changed to correspond with the textbook you are now using.

The module is composed of one lesson, namely:

• Lesson 1 – Compare and Contrast the Loan Requirements of the Different
Banks and Nonbank Institutions and Cite these Institutions in the Locality

After going through this module, you are expected to:

1. Identify bank and nonbank institutions in the locality;
2. Compare and contrast the loan requirements of bank and nonbank
institutions;
3. Explain why bank and nonbank financial institutions demand for loan
requirements; and
4. Perform decision-making on bank and nonbank loan application.

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 What I Know

Direction: Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.

1. Daniel will apply for a loan in Palawan Bank. What general document will he
accomplish first?
a. Daniel’s Signature c. Signature of spouse
b. Valid IDs d. Loan application form

2. Among the following, who is tasked to analyze the financial track record of the
borrower?
a. Manager c. Loan officer
b. Credit analyst d. Credit bureau

3. When the borrower is married, which of the following signature/s should NOT be
missed when filling-out the general loan application documents?
a. Borrower and spouse’s signature
b. Borrower’s signature only
c. Borrower and co-maker’s signature
d. Co-maker’s signature only

4. These pertain to loan requirements that reflect the employment/business of the

borrower.
a. Income Documents
b. Collateral Documents
c. General Loan Application Documents
d. Generic Loan Documents

5. Which loan requirements are submitted to support the loans secured from the
banks?
a. Income Documents
b. Collateral Documents
c. General Loan Application Documents
d. Generic Loan Documents

6. All are needed loan requirements for business owners or self-employed

individuals EXCEPT for:
a. Business/ Mayor’s Permit c. Audited Financial Statements
b. Bank Statement d. Certificate of Employment

7. Which of the following is NOT an example of general loan application documents

in nonbank financial institution?
a. Water bill c. Certificate of no pending case
b. Electric bill d. Certificate of Registration

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8. Which of the following is the collateral document/s for owned vehicles required
by nonbank financial institutions?
a. Copy of ownership
b. Transfer Certificate of Title
c. Official Receipt & Certificate of Registration
d. Tax declaration & Tax clearance

9. To accomplish one of the income documents, a borrower may present copy of

payslip reflecting how many month/s?
a. 6 months c. 3 months
b. 1 month d. 4 months

10. Which of the following is mandated by the Banko Sentral ng Pilipinas to be

clearly stated in the loan application and contract?
a. Loan amount c. Kind of business
b. Purpose of the loan d. Kind of employment

11. All are examples of income documents EXCEPT for:

a. Employment Certificate c. Copy of Visa
b. Business/ Mayor’s Permit d. Copy of Income Tax Return

12. In nonbank financial institutions’ general loan application documents, which

of the following can be presented by an OFW borrower?
a. Copy of Passport c. Signature of co-maker
b. Business Permit d. Certificate of Employment

13. Which of the following is NOT a reason for financial institutions to demand
for loan requirements?
a. To assess the financial capability of the borrower
b. To evaluate borrower’s credit ratings
c. To verify the identity of the borrower
d. To gain linkages with suppliers and customers

14. Jessica, a self-employed individual applied for a loan in a bank. One of the
documents she submitted is a copy of her Income Tax Return for one year. The
bank declined her application. Why do you think so?
a. She must submit two copies of her ITR
b. Her ITR must be for the last 2 years
c. Her ITR must be for the last 6 years
d. She must not submit the ITR
15. Which of the following is reflected in the credit rating of the borrower?
a. Credit balance c. Credit history
b. Loanable amount d. Both a and b

2
 Compare and Contrast the
Lesson Loan Requirements of the
1 Different Banks and Nonbank
Institutions and Cite these
Institutions in the Locality

Businesses need sources of funds to aid in the financial aspect of their business
operations such as for working capital requirements or business expansions. One
of the sources of financing is acquired through debt financing. It can make through
borrowing from banks and nonbank financial institutions like lending companies.
It creates an obligation for the borrower to pay the interest and the principal
amount being loaned.

During this challenging time brought about by the COVID-19 pandemic,

businesses and even individuals resort to applying for loans in banks and nonbank
financial institutions to support their businesses and/or finances. It is therefore
necessary to know the loan requirements of various financial institutions so that
the loan application will be approved.

What’s In

You have already learned in your previous lesson how to distinguish financial
institutions and explain the tools in managing cash, receivables and inventory.
Now, before you proceed, this next activity will help you recall and apply things you
have learned.

Notes to the Teacher

Begin the lesson by letting the students do Activity 1 & 2 individually
as a sort of review. These activities will give the learners the
opportunity to ponder on the things they have learned in the previous
lessons.

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Activity 1: What Financial Institution Am I?
Direction: Put a check (✓) on the boxes to determine whether the type and
characteristics of financial institutions are bank or nonbank.

Financial Institution Types and Characteristics Bank Nonbank

1. A financial intermediary that brings together depositors

and borrowers
2. Governed by Banko Sentral ng Pilipinas (BSP)

3. Can be a leasing, investment and insurance company

that extend credit and/or financing to other companies
4. Regulated by Securities and Exchange Commission (SEC)
5. Can be universal or commercial which is deposit-taking
and raising funds for businesses

Activity 2: My Financial Toolbox: Which Tool Will I Use?

✓ Direction: Determine the tools in managing cash, receivables and

inventory. Re-arrange the scrambled letters to form the specific
term then match its definition provided inside the box by writing them
in the blanks.

-A liquidity measure computed by subtracting current liabilities from current

assets

-The time it takes for the business to collect its accounts receivables after the
payment of its raw materials

-The time from the purchase of raw materials to the cash receipt

-The time it takes for the business to sell its finished products from the time of
procurement of raw materials

-The time it takes for the payment of raw materials from the time they are acquired

1. TEN WKINORG PICATAL - ____________________________________________________

Definition: _______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

2. OPNGERATI CCYEL - ________________________________________________________

Definition:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

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3. HCAS CONREVIONS CYLEC - _________________________________________________
Definition: _______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

4. ACOUCSNT ABLEYAP PIERDO - __________________________________________

Definition: _______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

5. VENINTYOR PIDERO - ________________________________________________________

Definition:_______________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

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 What’s New

There are several financial institutions that help simple communities grow and
expand through generation of funds for economic progress. This activity will help
you cite bank and nonbank financial institutions in your locality.

Activity 3: Citing My Source of Fund

Direction: Make a list of bank and nonbank financial institutions in your locality to
help you solve the problem in the given situation.

Suppose you are a business owner in your place and because of the existing
COVID-19 pandemic, your fund which is necessary to continue your business
operations in the New Normal is running low. You need to procure face masks,
disinfectants, sanitation boxes and thermal scanners in compliance with the health
and safety protocols of the Inter-Agency Task Force in your municipality.

Where would you go to apply for a loan if informal lenders or “5-6” are not available
for you to generate additional funds?

BANKS NONBANKS

1. 1.

2. 2.

3.

4.

5.

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 What is It

In Activity 1, you were able to list bank and nonbank financial institutions found in
your locality which are considered sources of funds. In this part of the module, you
will further find out the different loan requirements of bank and nonbank financial
institutions which are essential for loan application approval.

Loan Requirements of Banks

Lending is the bread and butter of banks. Government and private banks earn
income through interest while helping the community by financing short-term and
long-term loans. Some banks also provide credit facilities and business loans from
small and medium enterprises (SMEs) to large corporations. Individuals can also
avail loans in banks through personal loans.

How does the process of having loans be possible? Well, it all begins by going to a
financial institution and state your desire to apply for a loan. The borrower has to
provide certain information that will be assessed based on his financial capacity.
These documents which are essential to the provision of loans are called loan
requirements.
1. General Loan Application Documents:
1.1. Properly accomplished Loan Application Form
1.2. Two (2) valid IDs
1.3. Signature of the borrower
1.4. Signature of spouse (only if applicable)

2. Income Documents:
2.1 For employed individuals:
2.1. Certificate of Employment
2.2. Copy of Latest Income Tax Return (ITR) only if applicable
2.3. Copy of Payslip for three (3) months (in lieu of ITR)

2.2 For self- employed/business owners:

2.2.1. Articles of Incorporation and By-Laws with SEC Registration
Certificate
2.2.2 DTI Registration/Certificate
2.2.3. Copy of Income Tax Return (ITR) with Statement of Assets and
Liabilities (SALN) for the last two (2) years
2.2.4. Audited Financial Statements for the last two (2) years
2.2.5. Bank Statements for the past six (6) months
2.2.6. List of Trade References (at least three (3) names of major
suppliers/customers with contact numbers)
2.2.7. Mayor’s/ Business Permit

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3. Collateral Documents (for secured loans only) - depending on the collateral
3.1. Copy of owner’s duplicate copy of ownership
3.2. Lot plan with location/vicinity map certified by licensed geodetic
engineer
3.3. Transfer Certificate of Title (TCT)
3.4 Copy of Tax declaration/ Tax receipts/ Tax clearance

Loan Requirements of Nonbank Financial Institutions

Nonbank financial institutions specifically lending and microfinance companies

also cater SMEs and individuals for loans. The lending process is faster as
compared to banks but some have distinct requirements.
1. General Loan Application Documents:
1.1. Properly accomplished Loan Application Form
1.2. Two (2) valid IDs
1.3. Signature of the borrower
1.4. Signature of spouse (only if applicable)
1.5. Signature of co-maker
1.7. Certificate of no pending case (notarized)
1.8. Proof of billing (Electric or Water Bill)
1.9. Copy of Passport/Seaman’s book, visa, Overseas Employment
Certificate and plane tickets- for OFWs only

2. Income Documents:
2.1. Certificate of Employment
2.2. Bank Statement (only if applicable)
2.3. Copy of Payslip for three (3) months
2.4. Business Permit (for self-employed only)

3. Collateral Documents
3.1. Copy of Official Receipt (OR) and Certificate of Registration (CR) for
owned vehicles
3.2. Copy of Tax declaration/ Tax receipts/ Tax clearance for land

Important Reminder!

The Banko Sentral ng Pilipinas mandates that the purpose of the loan or any
other credit accommodation shall be clearly stated in the loan application and in
the contract between the lender and the borrower. The proceeds of the loan must
be utilized only for the purpose(s) stated in the application and contract. However,
the borrower may still use the loan proceeds to other purposes provided that these
are among those which are permitted to be granted under existing laws and
regulations.

*Loan requirements vary from one lending company/bank to another. The list stated
on the preceding pages only contains the most commonly asked loan requirements
and does not specify some special requirements of other companies.

8
*Some financial institutions may/may not require a borrower to provide all the
documents listed.

Why Bank and Nonbank Financial Institutions Demand Loan

Requirements

Before granting a loan or any credit accommodation, financial institutions demand

for the loan requirements to assess whether the loan amount matches the financial
capacity of the borrower; verify the identity of the borrower to avoid identity theft;
and see to it that the borrower has the capability to sustain loan payments. The
credit analyst will analyze the financial track record of the borrower which is
referred to as credit ratings.

The credit ratings will serve as the borrower’s scorecard that will reflect his credit
history and serves as means to formally evaluate the borrower without bias.

These credit ratings are submitted to the credit bureau or the agency that gathers
the credit history of a borrower and sells this information for a fee. In the
Philippines, the operational credit bureau is the Credit Information Corporation.

If the borrower is found financially capable of paying the loanable amount, then the
loan application will be approved. However, if the credit analyst found out that the
borrower has a negative credit rating or inability to pay, the loan application will be
disapproved.

Notes to the Teacher

The brief discussion above provided enough information for the
students to do the activities on the succeeding pages. Such
activities are designed for individual preparation and lesser
teacher intervention.

9
 What’s More

Activity 4: Spot the Similarities and Differences

Direction: Use a Venn diagram to show how the loan requirements of banks and
nonbanks are the same and different. List at least 5 per heading.

BANKS NONBANKS
Differences Similarities Differences

10
Activity 5: Forecast Your Credit Profile
Direction: Imagine yourself five (5) years from now, you are a businessman/woman
and still single. Provide the requirements asked so that your loan application will
be approved.
Situation A: You need to borrow from AZY Bank an amount of one hundred fifty
thousand pesos (P150,000.00) for the additional product offerings of your Café. The
monthly amortization of your loanable amount is six thousand eight hundred sixty
pesos (P6,860.00) for two years. Supply the needed information below so that you
can avail the loan.

GENERAL

Main Requirement: 1. ____________________________________________________

2 Valid IDs 2._______________________________ 3.________________________
Signature 4._______________________________
Signature of spouse 5.__________________________

INCOME

Approximate Monthly Income: 6._____________________________

7.________________________________________________________
8.________________________________________________________
9.________________________________________________________
10._______________________________________________________
Suppliers/customers’ data is not needed.
Monthly expenses aside from the loan amortization: P32,000.00

Situation B: AMAZING Finance Corporation is one of the lending companies within

your municipality. You wanted to avail a loan and you have already submitted their
general requirements. Now you are asked to provide only three Income
requirements and a collateral. You are just renting an apartment but you own a
car.

INCOME
11._________________________________________________________
12._________________________________________________________

COLLATERAL

13._________________________________________________________

11
Activity 6: Valuing What is Required
Direction: Explain key points why bank and nonbank financial institutions demand
for loan requirements. Devise a creative acrostic for each explanation using the
beginning letters.

12
 Rubrics in Rating Activity 6: Valuing What Is Required
Standards
Score
Content Reasoning Grammar
Comprehensively All statements are
Correctly stated four explained the stated grammatically
5 reasons; comprised reasons; coherent correct and began
all key points and completely with the correct
organized letters
Statements have a
Satisfactorily
Correctly stated three number of
explained the stated
4 reasons; comprised grammatical errors
reasons; reasonably
most key points but not critical for
coherent
comprehension

Statements have
Correctly stated two Fairly explained the few careless writing
3 reasons; comprised stated reasons and errors that
basic key points fairly coherent moderately impede
comprehension

Statements have
Correctly stated only Provided reasons many careless
2 one reason; fairly but vague and writing errors that
comprised a point confusing impede
comprehension

Tried providing
Most statements
1 answer but missed Barely reasonable
are erroneous
the point

Notes to the Teacher

Activities 2, 3 and 4 are designed to develop and enrich students’
knowledge on the loan requirements of bank and nonbank
institutions. The activities ensure that students’ full
understanding of the lesson is achieved. The scoring rubrics will
guide the students in doing the activities.

13
 What I Have Learned

At this point, let us see how much you have gained from the discussions and
activities you have undergone.

Activity 7: Fill in the Blanks

Direction: Complete the sentences below by filling in the blanks with the correct
word or phrase.

Government and private banks earn income through 1.________________while

helping the community by financing short-term and long-term loans. For this
reason, 2. _____________________ is the bread and butter of banks.

Individuals also avail loans in banks through 3.__________________________ and

small and medium enterprises are provided with credit facilities and
4.______________________ loans.

The borrower has to provide certain information that will be assessed based on
his 5.______________________________.

6.________________________are the documents which are essential to the

provision of loans. These loan documents can be 7.____________________, income
documents and 8.___________________________.

Aside from the loan application form, the general loan application documents
require borrowers to provide 9.__________ valid IDs and 10.____________________
of the borrower.

The income documents include 11.___________________________________, Bank

Statement (only if applicable) and Copy of 12.________________ for three (3)
13.___________. Beside these, only the 14._______________________________ was
added to the income requirements for those self-employed who wishes to apply
a loan in nonbank financial institutions.

For owned vehicles, the collateral documents to be presented are the Official
receipt and 15._______________________________________.

One reason why financial institutions demand for the loan requirements is to
verify the identity of the borrower to avoid 16._______________________. The
17.__________________________ will analyze the financial track record of the
borrower. The 18._____________________________ serve as the borrower’s
scorecard that will reflect his 19. ____________________ and as means to formally
evaluate the borrower without bias. These credit ratings are submitted to the
20.________________________ or the agency that gathers the credit history of a
borrower and sells this information for a fee.

14
 What I Can Do

Hi Learner! This time, you will now apply what you have learned in this module.
This activity will help you transfer into real-life situations the knowledge and skills
you have gained.

Activity 8: Approved or Disapproved? You Decide!

Decide whether a loan application will be approved or disapproved considering the
loan requirements of bank and nonbank financial institutions in your locality.
How to do it?
1. Assume that you are a loan officer of a bank or nonbank financial institution. In
your neighborhood, ask one who is planning to get a loan and is willing to be
interviewed. It is highly recommended that your interviewee is already a borrower,
either of a bank or nonbank financial institution.
Tell them that this is only for practice and remind them that they may make
estimations in figures asked if they do not want to reveal actual amounts in
income and expenses since this is just a drill.
2. Make your own interview questions and be guided with the following needed
data:
✓ Target bank or nonbank institution they intend to borrow
✓ Loan amount ✓ Civil Status
✓ Purpose of the Loan ✓Employment
✓ Estimation of Monthly Income
✓ Estimation of Monthly Expenses including existing loan payment (if
applicable)
✓ Available loan requirements

3. After gathering the needed data, match the available requirements of your
interviewee with the list of requirements you have learned and make your decision
as to whether your interviewee’s loan application is approved or not.

Gentle reminder: Consider yourself as a professional loan officer. You are now
responsible to uphold utmost information confidentiality. Whether your
interviewee is a family member or not, you must also apply fairness with your
decision.

4. Prepare summary of data. Please do not include the name and address of
your interviewee in the summary of data for confidentiality and ethical
purposes. Discuss and elaborate your decision.

15
 Rubrics in Rating Activity 8: Approved or Disapproved? You Decide!

Score
Standards 3 2 1
Interview Listed at least six Listed only five or Listed misleading
Questions suitable less suitable questions to gather
questions, questions to gather needed data
gathered all the the needed data
needed data;
grammatically
correct
Data Presented Presented Presented only Presented only
necessary data four to seven three (or below)
completely necessary data necessary data
or
With no presented
data
Correct and Correct decision; With incorrect
Decision
sound decision; points are decision; points are
points are clearly somewhat stated not clear and not
but not well elaborated
stated and well
elaborated or
elaborated No stated decision
Properly executed Somewhat Did not executed
Confidentiality
confidentiality executed confidentiality and
(Interviewee’s confidentiality failed to uphold
(Stated one of the fairness in decision-
name and
interviewee’s making
address were not identity either (Interviewee’s name
stated) name or address) and address were
stated)
Properly upheld Somewhat upheld Did not uphold fair
Fairness
fair decision- fair decision- decision-making
making making (Decision is
(Decision is inappropriate on
(Decision is
appropriate the data gathered)
appropriate on though the data
the data gathered is
gathered) lacking)

16
 Assessment

Direction: Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. These pertain to loan requirements that reflect the employment/business of the
borrower.
a. Income Documents
b. Collateral Documents
c. General Loan Application Documents
d. Generic Loan Documents

2. Which of the following is the collateral document/s for owned vehicles required
by nonbank financial institutions?
a. Copy of ownership
b. Transfer Certificate of Title
c. Official Receipt & Certificate of Registration
d. Tax declaration & Tax clearance

3. Which loan requirements are submitted to support the loans secured from the
banks?
a. Income Documents
b. Collateral Documents
c. General Loan Application Documents
d. Generic Loan Documents

4. Daniel will apply for a loan in Palawan Bank. What general document will he
accomplish first?
a. Daniel’s Signature c. Signature of spouse
b. Valid IDs d. Loan application form

5. In nonbank financial institutions’ general loan application documents, which of

the following can be presented by an OFW borrower?
a. Copy of Passport c. Signature of co-maker
b. Business Permit d. Certificate of Employment

6. To accomplish one of the income documents, a borrower may present a copy of

payslip reflecting how many month/s?
a. 6 months c. 3 months
b. 1 month d. 4 months

7. Which of the following is NOT an example of general loan application documents

in nonbank financial institution?
a. Water bill c. Certificate of no pending case
b. Electric bill d. Certificate of Registration

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8. Which of the following is mandated by the Banko Sentral ng Pilipinas to be
clearly stated in the loan application and contract?
a. Loan amount c. Kind of business
b. Purpose of the loan d. Kind of employment

9. Which of the following is NOT a reason for financial institutions to demand for
loan requirements?
a. To assess the financial capability of the borrower
b. To evaluate borrower’s credit ratings
c. To verify the identity of the borrower
d. To gain linkages with suppliers and customers

10. When the borrower is married, which of the following signature/s should
NOT be missed when filling-out the general loan application documents?
a. Borrower and spouse’s signature
b. Borrower’s signature only
c. Borrower and co-maker’s signature
d. Co-maker’s signature only

11. Among the following, who is tasked to analyze the financial track record of
the borrower?
a. Manager c. Loan officer
b. Credit analyst d. Credit bureau

12. All are examples of income documents EXCEPT for:

a. Employment Certificate c. Copy of Visa
b. Business/ Mayor’s Permit d. Copy of Income Tax Return

13. Which of the following is reflected in the credit rating of the borrower?
a. Credit balance c. Credit history
b. Loanable amount d. Both a and b

14. All are needed loan requirements for business owners or self-employed
individuals EXCEPT for:
a. Business/ Mayor’s Permit c. Audited Financial Statements
b. Bank Statement d. Certificate of Employment

15. Jessica, a self-employed individual applied for a loan in a bank. One of the
documents she submitted is a copy of her Income Tax Return for one year. The
bank declined her application. Why do you think so?
a. She must submit two copies if her ITR
b. Her ITR must be for the last 2 years
c. Her ITR must be for the last 6 years
d. She must not submit the ITR

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 Additional Activities

Let us reinforce the skills/knowledge that you have gained from this lesson by
doing the next activity.

Activity 9: Memory Booster

This activity will boost your memory with the terms used in this lesson. Find and
encircle them in the puzzle.

A V A L I D W O N S E R T T O B S

C I D E N T I F I C A T I O N A I

O B L I G C R E D I T R A T I N G

L S I G N A T U R E D D A T G K N

L S D V U I F O R R M S A D B S A

A D S O W N E R S H I P N E E T T

T R S C E R T I F I C A T E W A U

E S A R T E E N T E A Y L E N T R

R B I T A X N L O A N S V S S E S

A P P L I C A T I O N L Y P D M S

L B L O A S N F O R M I R F G E E

T A S O D P I H N L O P B L N N R

I N C I N C O M E T E C B L I T N

19
 20
What I What’s In
Know Activity 1.
1. B
1. D 2. B
2. B 3. NB
3. A 4. NB
4. C 5. B
5. B Activity 2
6. D 1. NET WORKING CAPITAL- A liquidity measure computed by
7. D subtracting current liabilities from current assets
8. C 2. OPERATING CYCLE- The time from the purchase of raw materials to
9. C the cash receipt
10. B 3. CASH CONVERSION CYCLE- The time it takes for the business to
11. C collect its accounts receivables after the payment of its raw materials
12. A 4. ACCOUNTS PAYABLE PERIOD- The time it takes for the payment of
13. D raw materials from the time they are acquired
14. B 5. INVENTORY PERIOD- The time it takes for the payment of raw
15. C materials from the time they are acquired
Activity 3
Answers may vary depending on the location of the learner
BANKS: NONBANKS:
• Landbank of the Philippines •ECLOF
• Development Bank of the Philippines (DBP) •DUNGGANON
• First Consolidated Bank (FCB) •CARD
• Eastwest Bank •TSKI
• Cooperative Bank of Palawan •Home Credit
• The Palawan Bank •Flexi Finance
• Bank of the Philippine Islands (BPI) •First Standard Finance Corp.
• Philippine National Bank (PNB) •ASA Philippines Foundation
• MetroBank •NATCCO
• RCBC
Activity 4
BANKS NONBANKS
-Articles of
Incorporation and -Loan Application Form -Signature of co-maker
By-Laws w/ SEC Reg -2 Valid IDs -Certificate of no
-DTI Reg/Certificate -Signature of borrower pending case
-Copy of Income Tax -Signature of spouse -Proof of billing
return -Certificate of Employment -Copy of Passport
-Audited Financial -Copy of payslip for 3 months -visa
Statements -Bank Statement -Seaman’s book,
-List of trade references -Business/Mayor’s Permit -Overseas
-Duplicate copy of -Copy of Tax declaration/tax Employment Certificate
Ownership clearance/tax receipts -plane tickets
-Lot plan w/ map - Copy of OR and CR
-Transfer Cert
of Title
Answer Key

Activity 5
1. Loan Application Form
2.- 3. Answers may vary
4. Signature of the student
5. Not applicable
6. Any amount above P39,000.00 but
less than P50,000.00 (answers may vary)
7. DTI Certificate
8. SALN
9. Bank Statement
10. Mayor’s/Business Permit
11. Bank Statement
12. Business Permit
13. OR and CR
Activity 8
Answers may vary. Please refer to the
rubrics for scoring.
Assessment
1. A 9.
2. C 10.
3. B 11.
4. D 12.
5. A 13.
6. C 14.
7. D 15.
8. B
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Activity 6
Answers may vary. Please refer to the
rubrics for scoring.
Activity 7
1.Interest
2. Lending
3. Personal loans
4. Business loans
5. Financial capacity
6. Loan requirements
7. General loan application
8. Collateral
9. Two
10. Signature
11. Certificate of employment
12. Payslip
13. Months
14. Business permit
D 15. Certificate of Registration
A 16. Identity Theft
B 17. Credit analyst
C 18. Credit ratings
C 19. Credit history
D 20. Credit bureau
B
Activity 9
References
Banko Sentral ng Pilipinas. Manual of Regulations for Non-Bank Financial
Institutions (MORNBFI). 2008
Cayanan, A. and Borja, D. Business Finance First Edition. Philippines: Rex Book
Store. Inc., 2017
Yumang, K., Pao, T., Benito, P. and Pefianco, E. Exploring Small Business and
Personal Finance. Philippines: The Phoenix Publishing House, Inc., 2016

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For inquiries or feedback, please write or call:

Department of Education – SDO Palawan

Curriculum Implementation Division Office

2nd Floor Deped Palawan Building
Telephone no. (048) 433-6392

Learning Resources Management Section

LRMS Building, PEO Compound
Telephone no. (048) 434-0099