Business Finance Lesson-Exemplar - Module 3

Lesson Exemplar in English for Academics and Professional Purposes (EAPP) Using the IDEA
Instructional Process
Modular Distance Learning
(Learners-Led Modality)
This lesson exemplar is anchored to the learner’s module.

This sample is part of Enclosure 7 of RM No. 296, s. 2020.
School Tanauan School of Grade Level Grade 12

Fisheries – Senior High
School
Teacher DIVINA GRACE M. Learning Area Business
LESSON RODRIGUEZ Finance
EXEMPLAR
Teaching Quarter First
Date Quarter
Teaching No. of Days 4
Time
I. Objectives At the end of the lesson, the learners are expected to:
a. Distinguish debt and equity financing;
b. Identify the bank and nonbank institutions in the vicinity and
enumerate their requirements and process; and
c. Present their output, data and ideas in a creative way.
A. Content The learners demonstrate an understanding of the sources and uses of
Standards short-term and long-term funds, and the requirements, procedure,
obligation to creditor, and reportorial necessities.
B. Performance The learners are able to:
Standards 1. Distinguish dent and equity financing;
2. Identify the bank and nonbank institutions in the vicinity that are
possible sources of funds, and enumerate their requirements and
process for loan application.
C. Most Essential Compare and contrast the loan requirements of the different banks and
Learning nonbank institutions and cite these institutions in the locality.
Competencies (ABM_BF12-IIIe-f-14).
D. Enabling N/A
Competencies
II. CONTENT Short-Term and Long-Term Funds
III. LEARNING
RESOURCES
A. References
Teacher’s Guide N/A
pages
Learner’s Material N/A
Pages
Textbook pages N/A
Additional Material Vibal group Inc. and Florenz C. Tugas, Aeson Luiz C. Dela Cruz, Alloysius
from Learning Joshua S. Paril, and Alger C. Tang. Business Finance, Araneta Avenue,
Resources Quezon City
The Commission on Higher Education in collaboration with the Philippine
Normal University: Teaching guide for Senior High School
List of Learning https://gbr.pepperdine.edu/2017/12/religious-beliefs-influence-financial-
Resources for decision-making/
Development and https://smallbiztrends.com/2016/01/small-business-finance-basics.html
Engagement https://www.dmu.ac.uk/study/courses/postgraduate-
Activities courses/international-business-and- ifinance-msc-degree/international-
business-and-finance-msc.aspx
https://www.credibly.com/incredibly/trending/debt-vs-equity-financing/
IV. PROCEDURES
A. Introduction What I need to know?
After going through this module, you are going to:
1. Distinguish debt & Equity Financing
2. Identify the Bank and Nonbank institutions in the vicinity that are
possible sources of funds and enumerate their requirements and process
for loan application.
What’s New?
Direction: Write your answer in the box provided below.
Question: What comes to your mind when you hear the words debt financing
and equity financing based
on your knowledge and
understanding in the
previous lesson? Copy the
rectangular box and write
your answers in your
notebook.
B. Development What I Know?

Let us determine how much you already know about the sources and uses of
short-term & Long-term funds
Direction: TRUE OR FALSE. Write T if the statement is correct and F if it is
wrong. Write your answers in your notebook.
_____1. Cooperative banks and credit cooperative are just the same.
_____2. All cooperative in the Philippines regulated and supervised by the
Cooperative Development Authority.
_____3. By resorting to debt financing, business ownership has kept and
maintained.
_____4.One of the aims of cooperatives is to provide goods and services to its
members to enable them to attain increase, savings, investments,
productivity, and purchasing powered income, and promote among
themselves equitable distribution of net surplus through maximum
utilization of economies of scale, cost sharing and risk sharing.
_____5. Capacity refers to the applicant’s net worth, which can be arrived at
by deducting total liabilities from total assets.
What’s In?
The role of the VP for Finance/Financial Manager is to determine
the appropriate capital structure of the company. Capital structure refers
to how much of your total assets has financed by debt and how much has
financed by equity.
- To be able to acquire assets, our funds must have come somewhere.

If it has bought using cash from our pockets, it has financed by equity.
- On the other hand, if we used money from our borrowings, the asset
bought has financed by debt.
What is it?
Debt Financing Versus Equity Financing?
https://www.credibly.com/incredibly/trending/debt-vs-equity-financing/
Debt financing is being done through borrowing, whether short-term

or long-term, and it usually comes with interest. This, together with other
charges, is referred to as the cost of borrowing or cost of debt. Common debt
financing arrangements include bank loans, issuance of debt instruments
like bonds, financing from nonbank institutions like lending companies and
cooperatives, assignment of accounts receivable, and selling of notes
receivables. In here, there exists a borrower-lender relationship. In the case
of banks and other nonbank institutions, borrowing entails compliance of
certain requirements.
Equity Financing, on the other hand, refers to the sale of ownership

interest, most often represented by shares, to raise fund for business
purposes. To compensate for the use of funds from equity financing,
dividends or profits shares has declared, set aside, and paid by the
business. Common Equity financing arrangements include funds raise by
the entrepreneur or business owner from friends and family, capital infusion
through direct sale of shares or through initial public offerings, and
financing by private companies. In here, there exists an investee-investor
relationship.
Short-term financing is debt scheduled to pay within a year while

long-term financing is debt paid in more than a year.
C. Engagement What’s More?

Direction: List the sources of funds that are found in your community and describe. Copy
the table below and write your answer in your notebook.
Sources of fund Describe
Example: Bank of the A bank is a financial institution involved in
Philippine Island (BPI) borrowing and lending money. Banks take
customer deposits in return for paying
customers an annual interest payment.
1.
2.
3.
4.
5.
What are the sources of funds?

The most common sources of funds include banks, cooperatives, and
commercial Finance companies. Cooperatives and commercial finance
companies are example of nonbank institutions.
 Bank- Supervised and regulated by the Bangko Sentral ng Pilipinas
(BSP), an establishment for the deposit, custody, and issue of money for
making loans and discounts, and for making easier the exchange of
funds. In the Philippines, banks include universal and commercial
banks, thrift banks, and rural and cooperative banks.
 Credit Cooperatives- With the primary objective of helping improve the
quality of life of its members. One of its aims is to provide goods and
services to its members to enable them to attain increased income,
savings, investments, productivity and purchasing power, and promote
among themselves equitable distribution of net surplus through
maximum utilization of economies of scale, cost-sharing and risk-
sharing. In particular, credit cooperatives promote and undertake
savings and lending services among its members. It generates a common
pool of funds in order to provide financial assistance to its members for
productive and provident purposes. All cooperatives regulated and
supervised by the Cooperative Development Authority (CDA). The BSP, in
coordination with the CDA, shall prescribe the appropriate prudential
rules and regulations applicable to the financial service cooperatives.
 Commercial finance companies- they are organizations without a bank
charter that advances funds to businesses by discounting notes
receivable, making loans secured by mortgage, or financing deferred-
payment sales of commercial and industrial equipment.
What are the usual loan requirements and application? See table
below.
Loan Applications Requirements Loan Application process

Demographics –includes the name  Receipt of application form
or business name, birthdate, and required documents;
address, SSS no. TIN no. phone no.
and other identifying information
such as valid government-issued
identification cards
Income or revenue refers to  Verification of information in
current personal income and the application form and
employer, employment and salary required documents may
history, and business revenue, if include interview;
there is already an existing
business.
Assets and Liabilities-applicants  Checking credit history
may ask to disclose their checking
savings and investment accounts
and their outstanding loans and  Writing credit report with
appropriate recommendations
credit cards, if there are any.
Contact or references-require  Documenting final decision
identification and contact
information of existing employers,
previous employers, or even nearest  If approved, final documents
sign-off (interest rate and
relative not living with the identified
other terms) and loan release
contact
Attest and authorization require  If rejected, rejection letter
affixing applicant’s signature on sent to applicant
the credit application stating that
everything on the application is
true and correct and authorizing
the lender to verify the information
provided with the identified
contacts and references.
The credit department evaluates on
the basis of Character, Capacity,
collateral, capital and conditions or
5C’s of credit
Note: Loan application requirements and process vary among banks, credit
cooperatives and commercial finance companies.
What I Can Do?

Direction: Copy the process questions below in your notebook and answer
directly.
1. In loan application, when is a co-maker required?
2. What is the importance of affixing applicant’s signature on the loan
application?
3. Enumerate the five C’s of credit and describe each.
What Other Activities Can I Engage In?
Direction: Choose one bank, one credit cooperative and one commercial
finance company. Research on the following: compare the loan application
requirements and loan application process.
D. Assimilation What I Have Learned?

Direction: Complete the sentence stem below. Write your answers on a
separate sheet of paper.
1. Sources of funds is important because:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
What I Can do?

Directions: Identify the following activity if either Long-term or short-term
financing.
Activity/Need Answer
1.Acquisition of equipment
2.Franchise of a fast-food outlet
3.Purchase of inventory for a clothing
shop
4.Loan for agricultural needs
(ex. Palay production)
5.Loan for purchase of a commercial
space
6.Auto-loan
7.Housing loan
8.Emergency loans
9.Development of a subdivision
10.Loan for sari-sari store supplies
V. REFLECTION Directions: Using the prompts below, write your personal insights about the
lesson in your notebook or portfolio.
I understand that _________________________________________________________

___________________________________________________________________________
I realized that _____________________________________________________________
___________________________________________________________________________
Prepared by: Checked by:
DIVINA GRACE M. RODRIGUEZ KRISTINE ANN I. CARANDANG

Teacher II Master Teacher II
Noted by:
SHIRLEY C. SIMAN ROWENA C. TERCERO

Vocational School Administrator Public School District Supervisor – West I
Validated by:
RONALDO V. RAMILO
Education Program Supervisor
EDNA U. MENDOZA, Ph. D.

Chief Education Supervisor
Curriculum Implementation Division
Recommending Approval:
RHINA O. ILAGAN, Ed. D
Officer-In-Charge - Assistant Schools Division Superintendent
Approved:
ROGELIO F. OPULENCIA
Officer-In-Charge - Schools Division Superintendent

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Lesson Exemplar in English for Academics and Professional Purposes (EAPP) Using the IDEA

This lesson exemplar is anchored to the learner’s module.

School Tanauan School of Grade Level Grade 12

B. Development What I Know?

- To be able to acquire assets, our funds must have come somewhere.

Debt financing is being done through borrowing, whether short-term

Equity Financing, on the other hand, refers to the sale of ownership

Short-term financing is debt scheduled to pay within a year while

C. Engagement What’s More?

What are the sources of funds?

Loan Applications Requirements Loan Application process

What I Can Do?

What Other Activities Can I Engage In?

D. Assimilation What I Have Learned?

What I Can do?

I understand that _________________________________________________________

Prepared by: Checked by:

DIVINA GRACE M. RODRIGUEZ KRISTINE ANN I. CARANDANG

SHIRLEY C. SIMAN ROWENA C. TERCERO

EDNA U. MENDOZA, Ph. D.

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