Sources Of Financing

Sources of Financing Having a total initial investment cost of Php 1,948,965, the initial contribution of the incorporators of EALA Inc. will not be sufficient to fund the project. As such, additional investments from potential investors as well as from institutions are necessary to execute the said project. With the contribution of EALA Inc. proponents amounting to Php 1,000,000, the company still needs Php 948,965 to finance the PantSaloon project. Fortunately, some venture capitalists are supportive of EALA Inc.’s business venture. 1. Leonila T. Amposta Vice-President for Operations, Bank of the Philippine Islands An Economics graduate, Leonila T. Amposta has been in the banking industry for 30 years. Her work has landed her positions in banks like Far East Bank, Asian Development Bank and Bank of South East Asia, before joining BPI as its VP for Operations. Apart from her expertise in banking, she is interested in starting her own business, particularly in the clothing industry. Hence, PantSaloon’s idea of custom-fit jeans production is indeed appealing to her. She is willing to buy shares of stocks of EALA Inc. amounting to Php 500,000. 2. Atty. Cristina A. Mortel Assistant General Manager for Admin & Chief Legal Counsel, Public Estates Authority Project Manager - CBP1, Macapagal Boulevard Atty. Mortel graduated from Ateneo de Manila University with undergraduate degree of Bachelor of Science major in Mathematics magna cum laude and Bachelor of Laws. She is presently the Assistant General Manager for Admin and Chief Legal Counsel of Public Estates Authority. Like Ms. Leonila T. Amposta, Atty. Mortel is interested in starting her own business or being part of a clothing company. Hence, she is willing to invest Php 250,000 for PantSaloon.

Though there are two additional shareholders, the total investing amount is still not enough to finance the project. Thus, EALA Inc. has to find a financial institution that will lend the company enough money to support the project. However, finding a bank that provides a loan for a start-up business like PantSaloon will be difficult hence the incorporators deem it necessary to have a guarantor to help with loan needs. EALA Inc. is fortunate to have a guarantor to support its business venture. 1. Atty. Peter Suchiangco Chief Executive Officer, CyberBay Corporation Atty. Suychiangco is an entrepreneur himself that is why he is supportive to those entrepreneurs who lack financial resources. As such, EALA Inc. can now loan a total of Php 198,965 at 14% 1, payable for 2 years. Since the loan is quite small, EALA Inc. decided to borrow it from one bank, specifically Philippine National Bank (PNB).

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PNB’s interest rate is 14%. The rate may change depending on the bank of choice.