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At Bayfront Capital Advisors, we empower mid-market, founder-led, and family-owned businesses with the right financing solutions to drive growth. Whether you need working capital, flexible credit, or structured funding for large-scale projects, our tailored debt advisory services connect you with the best capital providers to meet your needs—efficiently and strategically.
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Invoice Financing
Invoice Financing (aka invoice discounting) is a loan product that companies can use to obtain short-term funding from banks by pledging customer invoices. Banks typically advance 70% to 90% of the invoice value upfront.
Invoice financing is particularly useful for businesses in industries such as wholesale, distribution, manufacturing, and professional services—especially those with clients who operate on credit terms. Companies in these sectors do not have fixed assets such as plant, property or equipment to provide as security for the loan. But if they have good paying customers doing repeat business then invoice financing can be a reliable source of funding the business growth.
What you need to know
To obtain invoice financing, the company (aka borrower) must have delivered the goods (or service) to its customers and is awaiting the invoice payment.
Banks prefer to finance invoices from top tier names or customers who have existing relationships with the bank. Banks scrutinize customer contracts, account receivable records and payment history to determine whether to fund or not, and fund under what terms. It is therefore important for the borrower to have good systems, record keeping and collection practices and proper documentation of policies and procedures.
Bank requires the borrower to assign the invoices and open a bank account where the customer payments are to be received. It allows the bank to establish the legal ownership of the receivables and control of the incoming payments. The invoice assignment is done contractually. The appropriate language is written in the lender’s loan agreement. The bank usually requires the borrower to ask the customers to pay to that account by putting the bank account details in the invoices.
Bank may require additional risk mitigation measures such as personal guarantee from the owners.
Advantages
- Fast access to cash – Businesses receive funding within days, avoiding long payment cycles.
- No collateral required – Since invoices serve as collateral, there’s no need to pledge physical assets.
- Scalable financing – The funding amount grows with sales volume, making it ideal for expanding businesses.
- Flexible terms – Some lenders offer confidential financing, allowing businesses to maintain normal client relationships.
Considerations
- Limited eligibility – Only invoices from financially stable customers may qualify. Invoices from customers who do not pay on time are likely to be excluded.
- Finance rate/discount rate – there is no uniform market standard for pricing. Each bank has its own way of structuring and pricing the product.
- Change of process – Some banks may insist on notifying customers and change the payment collection to pass through a new bank account opened with the bank.
Key Takeaway
Invoice financing is a well established and widely used loan product. While there is limited market standardization in the Philippines, almost all local banks offer this product. The process of obtaining approval is effort intensive. But once the approval is in place, the utilization is relatively straight forward. Bayfront has relationships with all the banks that offer this product, and has assisted many companies to successfully get the borrowing applications approved.
Invoice Financing is a short-term funding solution that allows businesses to access cash by leveraging their unpaid customer invoices. Instead of waiting for customers to pay, companies can receive an advance—typically 70% to 90% of the invoice value—while the remaining balance is released once the invoice is paid, minus fees.
This option is ideal for businesses that experience cash flow gaps due to long payment cycles. By converting receivables into immediate working capital, companies can cover expenses, pay suppliers, and reinvest in growth without taking on traditional debt.
- Businesses submit outstanding invoices to a financial institution, which evaluates and approves eligible invoices.
- A percentage of the invoice value is advanced upfront, while the remaining balance is held as a reserve.
- Customers make payments directly to the lender or a designated account.
- Once the invoice is fully paid, the lender releases the remaining amount after deducting applicable fees.
Invoice financing is particularly useful for businesses in industries such as wholesale, distribution, manufacturing, and professional services—especially those with clients who operate on credit terms. However, approval depends on the creditworthiness of customers, as lenders assess their financial stability and payment history.
Advantages
- Fast access to cash – Businesses receive funding within days, avoiding long payment cycles.
- No collateral required – Since invoices serve as collateral, there’s no need to pledge physical assets.
- Scalable financing – The funding amount grows with sales volume, making it ideal for expanding businesses.
- Flexible terms – Some lenders offer confidential financing, allowing businesses to maintain normal client relationships.
Disadvantages
- Higher costs – Fees and interest rates can be more expensive than traditional bank loans.
- Limited eligibility – Only invoices from financially stable customers may qualify, excluding businesses with risky clients.
- Potential loss of control – Some lenders manage payment collection, which can impact customer relationships.
Lenders want to make sure they get paid back, so they focus on whether the invoices are solid and collectible. Before approving financing, they check a few key things:
- Who your customers are – Banks feel safer lending against invoices from big, financially stable companies that have a history of paying on time.
- Invoice legitimacy – The invoices need to be real, undisputed, and backed by contracts. Some banks might even ask for proof of delivery before releasing funds.
- Payment behavior – If your customers are known for late payments, the bank might lower the amount they’re willing to finance or add stricter terms.
- Your financial health – Even though the loan is backed by invoices, banks still check if your business has steady cash flow and isn’t drowning in debt.
- Legal setup – Some banks require formal invoice assignment, meaning payments go directly to a controlled account. If that’s not possible, they might ask for extra guarantees.
At the end of the day, lenders just want to lower their risk. The stronger your invoices and customer relationships, the better your chances of getting approved on good terms.
Revolving Credit Line
Revolving Credit Line (aka revolver or revolving line) is a special type of loan where the borrower can draw, repay and redraw, either partially or in full, at any time during the tenor of the loan. There is no penalty for partial or full repayment.
Borrowers can use a revolving line to finance supply chain activities such as purchase of inventories and supplier payments. Banks also allow the line to be used to bridge liquidity gaps such as invoice financing. Some banks allow all purpose revolving lines which allows funds to be used for payroll or small capital expenditure like machinery upgrade.
Supply chain activities tend to have tide and ebb patterns, for which the revolving line is ideal e.g. line is drawn when inventories build up and repaid when customers make payments. The versatility and flexibility makes the product a must have for growing companies.
What You Need to Know
To obtain a revolving line, the borrower must have a proven track record of strong inventory to cash cycle. Banks are more comfortable with borrowers that sell generic products and have known value in the market. Specialised, customised products are not preferred.
It is not common for a bank to grant a revolving line to a new borrower outright, unless the borrower is well known in the market and well banked, or the bank is refinancing an existing revolving line.
To approve a revolving line, banks do a deeper analysis of the borrower’s supply chain. Inventory-to-cash cycle is the most important. Banks scrutinize supplier contracts, customer contracts, inventory records, account receivable records and payment history to determine whether to fund or not, and fund under what terms. It is therefore important for the borrower to have a good ERP system that provides transparency and analytics on the entire supply chain. Also important are collection practices and proper documentation of policies and procedures.
Advantages
- Only pay for what you use – Interest applies only to the borrowed amount, not the entire credit limit (some banks may apply an ongoing fee on the undrawn amount)
- Boosts cash flow stability – Helps businesses manage short-term gaps between expenses and incoming revenue.
- No need for reapplication – Once approved, businesses can repeatedly draw from the credit line without additional paperwork.
- Once repayments are made, the credit becomes available again, allowing businesses to re-borrow as needed.
- There’s no obligation to use the full credit line—businesses can access funds only when necessary.
Considerations
- Requires more preparation than invoice financing to be eligible for the loan- ERP system, data accuracy, reporting have to be high quality.
- Not easily available to businesses that produce specialised products that do not have a secondary market, or whose prices are highly volatile (e.g. linked to price of commodities).
Key Takeaway
Revolving credit facility is a useful general purpose loan product. Flexibility in use of proceeds and longer tenor are highly desirable features. The process of obtaining approval is effort intensive. But once the approval is in place, the utilization is relatively straight forward. Bayfront has relationships with all the banks that offer this product, and has assisted many companies to successfully get the borrowing applications approved.
Project Finance
Project Finance is a long-term financing method used to fund major infrastructure and energy projects in the Philippines, such as toll roads, airports, power plants, water utilities, and transport terminals. In this structure, loans are repaid using the future cash flow generated by the project itself, not from the project sponsor’s main business or assets.
Project Finance requires setting up of a Special Purpose Vehicle (SPV) entity and involves multiple stakeholders including sponsors, banks, government agencies, and off-takers (buyers of the project output).
What You Need to Know
- The project finance borrower is an SPV created specifically to own and operate the project.
- Lenders rely on limited or non-recourse arrangements. Repayment is tied to the project’s revenue, not the sponsor’s overall credit.
- In the Philippines, project finance is commonly used to fund large-scale projects like PPPs (Public-Private Partnerships), local government infrastructure, and renewable energy developments.
- A strong off-take agreement (e.g., Power Purchase Agreements for energy) and financial strength of the sponsors (e.g. sufficient equity infusion and guarantees) are essential for bank approval.
- Due diligence is rigorous, requiring legal, technical, environmental, and financial review from third-party experts.
- Government approvals (such as ECC from DENR, DOE endorsement, or NEDA ICC review) often play a role in early stages.
Advantages
- Access to large-scale funding – Ideal for projects that require PHP 500 million or more in long-term capital.
- Risk containment for sponsors – Project risk is isolated through the SPV; this protects the sponsor’s balance sheet.
- Attractive to local banks and DFIs – Strong infrastructure projects attract both Philippine banks and multilateral lenders (e.g., ADB, IFC).
- Custom structuring – Financing terms are tailored to match project construction timelines and ramp-up periods.
- Support for national development – Project Finance enables developers to contribute to the country’s economic growth while accessing sustainable capital.
Considerations
- Longer lead times – Project Finance deals can take 6–12 months to reach financial close due to their complexity.
- High setup costs – Engaging advisors and consultants is necessary to meet lender requirements and ensure bankability.
- Reliance on off-take contracts – Lenders assess the financial strength and contractual terms of the off-taker very carefully.
- Need for government coordination – Especially for infrastructure, coordination with LGUs and regulatory bodies is required.
- Sponsor equity and guarantees – Lenders may ask for cost overrun support, equity injections, or completion guarantees from the sponsor.
Key Takeaway
Project Finance is a powerful option for Philippine developers looking to build large-scale infrastructure or energy projects. It offers long-term, sustainable funding, provided that the project is well-structured, has a clear revenue model, and strong contractual support.
At Bayfront Capital Advisors, we help project sponsors navigate the complexities of structuring project finance transactions in the Philippines. From SPV setup to bank syndication, our team works with developers, contractors, and government agencies to bring long-term capital to transformative projects across the country.
Secured Term Loan
A secured term loan is a long-term financing option that allows businesses to raise capital using commercial property or land as collateral. In the Philippines, secured term loans are commonly used to fund the development or refinancing of income-generating properties such as office buildings, retail spaces, warehouses, and cold storage facilities.
This type of loan is ideal for companies looking to unlock value from real estate assets, manage large capital expenditures, or fund long-term business expansion.
What You Need to Know
To apply for a secured term loan in the Philippines, your company must pledge fully owned, income-generating properties such as:
- Completed commercial buildings or strata units
- Warehouses, logistics hubs, or cold storage assets
- Vacant land with a clear development plan and government approvals
The bank evaluates the loan based on the property’s title, market value, rental income, and legal ownership. In most cases, borrowers are required to provide supporting documents including:
- Property title and valuation reports
- Lease agreements, tax declarations, and insurance policies
- Rent roll and historical occupancy
- Forecasted cash flow and repayment capacity
Loan repayment is typically made through property income, asset sale, or refinancing. Some loans may offer extended repayment timelines but most Philippine banks enforce a fixed term with little flexibility, especially if asset sale or refinancing is delayed.
Advantages
- Access to Large Capital – Raise significant funds by leveraging high-value real estate assets.
- Long-Term Repayment – Enjoy structured repayments over multiple years, ideal for CAPEX-heavy or long-term business strategies.
- Lower Interest Rates – Since the loan is secured, lenders typically offer more favorable interest terms compared to unsecured options.
- Retain Ownership – Use your real estate as leverage without giving up equity in your company.
Considerations
- Asset Ownership and Documentation – Borrowers must provide clean property titles and clear documentation on tenancy, valuation, and legal control. Properties with joint ownership or JV arrangements require careful legal review.
- Longer Processing Time – Banks require detailed credit evaluations and legal due diligence, often involving months of preparation and registration with the land registry office.
- Not for Specialized or Farm Land – Secured term loans are generally not suitable for farmland or niche assets that cannot be commercially valued or legally pledged.
Key Takeaway
A secured term loan is a strategic financing option for companies with strong real estate assets and long-term capital needs. While the process involves more documentation and due diligence than other loans, it provides access to large capital at better rates, allowing businesses to grow without compromising ownership.
At Bayfront Capital Advisors, we guide you through the entire process (valuation to structuring and bank coordination). Our expertise in the Philippine real estate and lending landscape ensures your secured term loan is done right from the start.
Financial Asset Backed Loan
Project Finance is a funding approach used for large infrastructure, energy, and industrial projects, where repayment comes primarily from the project’s future cash flows rather than the sponsor’s balance sheet. This financing model is commonly used for power plants, toll roads, airports, and other capital-intensive developments requiring long-term investment.
Unlike traditional corporate finance, project finance involves creating a separate legal entity (special purpose vehicle or SPV) to own and manage the project. Lenders rely on the project’s revenue-generating ability and structured risk allocation rather than the financial strength of the sponsor.
What You Need to Know
- Financing is non-recourse or limited recourse, meaning lenders have limited claims on the sponsor’s assets if the project fails.
- Project cash flows, not the company’s balance sheet, serve as the primary repayment source for debt.
- A special purpose vehicle (SPV) is created to isolate financial risk and facilitate contracts with lenders, contractors, and offtakers.
- Financing structures involve multiple stakeholders, including banks, institutional investors, and development finance institutions (DFIs).
- Risk is allocated through contracts, including engineering, procurement, and construction (EPC) agreements, power purchase agreements (PPA), and operation & maintenance (O&M) contracts.
Project finance is widely used for capital-intensive developments where risk needs to be shared among multiple parties, ensuring long-term financial viability.
Pros and Cons
Advantages
- Risk isolation – The SPV structure limits the sponsor’s liability, protecting their other business operations.
- High leverage potential – Allows large-scale projects to secure debt financing without excessive equity requirements.
- Long-term funding – Debt tenors match the project lifecycle, reducing financial strain in early years.
- Efficient risk allocation – Risks are distributed among lenders, sponsors, contractors, and offtakers through well-structured agreements.
Disadvantages
- High financing costs – Interest rates and transaction costs are often higher due to the complexity and risk involved.
- Complex negotiations – Involves multiple contracts and stakeholders, increasing legal and administrative expenses.
- Long lead times – Project finance deals require extensive due diligence, potentially delaying project start dates.
- Exposure to external risks – Economic, regulatory, and market changes can affect project viability and repayment ability.
What Lenders Want
Lenders in project finance are highly focused on risk mitigation and repayment certainty. Since loans are repaid from the project’s cash flow, not the sponsor’s balance sheet, they look for:
- Stable and predictable revenue – Long-term contracts like Power Purchase Agreements (PPA) or Toll Concessions assure steady cash inflows.
- Strong project sponsors – Experienced developers with a solid track record give confidence that the project will be executed successfully.
- Well-structured risk allocation – Lenders want clear contracts (EPC, O&M, supply agreements) that distribute risk across multiple parties.
- Regulatory and legal certainty – Permits, government approvals, and policy stability reduce the risk of disruptions.
- Sufficient equity commitment – Sponsors must have a meaningful financial stake to show commitment and absorb initial risks.
At its core, lenders want assurance that the project will generate reliable cash flow, risks are well-managed, and sponsors have skin in the game.
A financial asset-backed loan, also known as a loan-on-loan facility, warehouse credit line, or receivables-backed financing, is a funding option that allows non-bank financial institutions (NBFIs) to borrow using their loan receivables as collateral.
In the Philippines, many NBFIs such as digital lenders, financing companies, and SME-focused lenders do not have access to deposits like banks do. This type of loan helps them grow their portfolio by turning existing loans into immediate capital.
What You Need to Know
Banks evaluate the loan book of an NBFI and lend against its value. The NBFI continues collecting repayments from its borrowers, and those collections are used to repay the bank.
To proceed, banks typically assess:
- Origination and underwriting processes
- Portfolio performance, default rates, and repayment history
- The reliability of internal controls and reporting systems
There are two common forms:
- Term-Based Asset Backed Loan (ABL) – A fixed amount with a set maturity
- Warehouse Facility – A revolving line used to fund ongoing disbursements
Advantages
- Accelerates loan book growth – NBFIs can deploy more loans without waiting for repayments or raising equity.
- No hard collateral required – Receivables serve as the main security, making this accessible to asset-light lenders.
- Boosts return on equity (ROE) – Leverage increases profit potential without diluting ownership.
- Builds institutional track record – Securing a bank facility strengthens relationships with other lenders and investors.
- Designed for SME lenders – This model fits lenders with recurring short-term loans, especially for MSMEs.
Considerations
- Higher operational standards required – Only NBFIs with proper tracking systems and audited financials are usually eligible.
- Bank oversight on cash flow – Receivable payments may be routed through monitored accounts.
- Over-collateralization may apply – Banks often require a larger receivables pool than the amount they lend.
- Shorter tenors – Facilities typically range from 6 to 36 months depending on the asset structure.
Key Takeaway
A financial asset-backed loan is one of the most effective ways for NBFIs in the Philippines to grow their lending capacity without needing to raise new equity. It provides institutional funding that matches the pace of borrower demand and aligns with responsible credit expansion.
At Bayfront Capital Advisors, we help NBFIs structure and secure these facilities by working closely with local banks. Our deep experience with financial institutions ensures the funding is tailored, bankable, and built for long-term growth.
