Verifying SEC Registration of Lending Companies in the Philippines

A comprehensive legal guide (updated to August 7 2025)

1. Introduction

In the Philippines, nearly every business may register with the Securities and Exchange Commission (SEC), but lending companies must go one step further: they need a secondary license called a Certificate of Authority (CA) issued under Republic Act No. 9474 (the “Lending Company Regulation Act of 2007”). Verifying both the primary registration and the CA is therefore critical for compliance officers, investors, borrowers—and for lawyers assessing enforceability of loan contracts.

2. Legal Framework

Key Instrument	Core Requirements	Penalties for Non-Compliance
RA 9474 (2007) + IRR (2008)	Minimum ₱1 million paid-in capital; Filipino ownership ≥ 75 % (natural persons) or 60 % (if corporate shareholder); mandatory CA before starting operations.	Fine ₱10 000–₱50 000 and/or 6 months–10 years prison; disgorgement of illegal gains; SEC cease-and-desist.
Revised Corporation Code (2019)	Incorporation & corporate governance rules; SEC eSPARC / eFAST filing.	Administrative fines; suspension/revocation of primary registration.
SEC Memorandum Circulars - MC 19-2019 (Revised Rules on Lending & Financing Companies) - MC 18-2019 (Prohibition of Unfair Debt Collection) - MC 10-2022 (Interest-Rate & Fee Caps for Short-Term, Small-Value Loans) - MC 16-2023 (Expanded Cap incl. service fees)	Mandatory disclosure of CA on all advertising; max effective interest 6 %/month + processing fee ≤ 5 % of principal; no threats/obscene language in collections; mandatory data-privacy notices.	Suspension/revocation of CA; up to ₱1 million per violation; blacklisting of directors/officers.
Financing Company Act (RA 8556)	Different regime—larger capital (₱10 million NCR); may extend credit to enterprises.	Same range of SEC sanctions.
Related Statutes: AMLA, Data Privacy Act, Consumer Act, BSP Circular 1133-2022 on BNPL	KYC, data-privacy compliance, mandatory consumer redress mechanisms.	AMLA: up to life imprisonment & ₱5 million fine for laundering; NPC fines.

3. Why Verification Matters

Enforceability of Contracts. Courts regularly dismiss collection suits of entities lacking a CA; a loan agreement is void for being contrary to RA 9474 (§ 12).
Consumer Protection. Registered lenders must follow interest-cap rules, disclose total cost of credit (TCC), and submit periodic reports to SEC.
Corporate Risk. Directors/officers of an unlicensed lender face personal criminal liability—even if the corporation is registered.
Reputational & AML Exposure. Banks and payment gateways onboarding unlicensed lenders risk AMLA penalties for facilitating unlawful activity.

4. The Two-Step Verification

Step	What to Check	Where to Check
1. Corporate Existence	SEC Registration No. (e.g., CS201912345) & “Articles of Incorporation.”	SEC Express System (plain/certified copies) or eSPARC-Search beta.
2. Certificate of Authority	CA No. (format: L-20XX-###), date of issuance, status (Active/Revoked), authorized loan products.	SEC Public Register of Licensed Lending & Financing Companies (PDF/Excel list updated bi-weekly); “Public Advisories” page for revoked/flagged firms; walk-in verification at SEC Main Office, PICC Pasay.

Tip: A company may appear in the SEC CRS search yet not in the CA list—this is a red flag. Proceed only if both credentials are valid and current.

5. Reading the Certificate of Authority

Field	Common Pitfalls
Scope Clause	Some CAs restrict loans to certain sectors (e.g., micro-enterprise) or cap loanable amount. Violating scope ≈ operating without a CA.
Validity / Renewal	CAs have no fixed expiry but are deemed suspended if the annual report (GIS/AFS) or ₱10 000 surety bond lapses.
Address	Must match the principal business address in the Articles and the location declared to the LGU (mayor’s permit).

6. Practical Verification Workflow (2025 Edition)

Online Search (Free).
- Go to https://www.sec.gov.ph/lending-companies → open the latest Excel list → CTRL + F the company name or CA No.
- Cross-check in https://espapp.secexpress.ph → “Search Registered Company” → input exact corporate name.
Request Certified True Copies (₱ 115 per doc).
- Use SEC Express One-Time (eFAST) → pay via GCASH/LandBank → pick-up or courier.
Field Verification.
- Visit business premises; CA must be displayed prominently (§ 5 RA 9474 IRR).
- Check mayor’s permit and DTI signage for sole-proprietor branches (common with “franchise”-style lenders).
Check SEC Advisories & Orders.
- SEC posts Cease and Desist Orders (CDOs) and Revocation Orders almost weekly—many target online lending apps (OLAs).
- An entity under CDO may still show an “Active” CA in old lists; always read the latest advisory.

7. Dealing with Unregistered or Rogue Lenders

Scenario	Borrower / Lawyer Remedies
No CA at all	File a sworn complaint with SEC CGFD → possible CDO within 48 hours. Borrower may raise illegality as a defense to collection.
Revoked/Suspended CA	Treat as no CA. Directors/officers can be charged under § 12 RA 9474; evidence: SEC order + loan contract.
Harassment / Doxxing	Report to SEC Enforcement and Investor Protection Dept. (EIPD) citing MC 18-2019; parallel complaint to NPC for Data-Privacy violations; possible cyber-libel to NBI-CCD.
Excessive Interest	Invoke MC 10-2022 / MC 16-2023 (6 %/month EIR cap); file complaint with SEC; interest beyond cap deemed void ab initio.

Notable Jurisprudence

People v. Tongguan (CA-G.R. CR-HC 10947, 2024): confirmed that receipt of payments + advertising sufficed to prove “lending business” sans CA.
MG Finance Corp. v. Spouses Bautista (G.R. 249321, 2023): loan contract of an unlicensed lender declared void; borrower not liable to return principal under pari delicto doctrine’s consumer-protection exception.

8. Interaction with Digital & Alternative Lending

Model	Regulator & Permit
Online Lending Apps (OLAs)	Still a “lending company” if principal invests its own funds → needs CA + app disclosure. SEC MC 19-2019 requires submitting source code and screenshots before launch.
Peer-to-Peer (P2P) Platforms	Governed by SEC Crowdfunding Rules (2019); platform needs a Crowdfunding Intermediary License -- not a CA.
Buy-Now-Pay-Later (BNPL)	If the financier bears credit risk and is non-bank → must have CA or Financing License; also subject to BSP Circular 1133-2022 if integrated with payment systems.

9. Compliance Checklist for Corporations & Compliance Officers

Verify CA yearly during renewal of mayor’s permit.
Monitor SEC Advisories at least monthly; suspend onboarding of counterparties on any red flag.
Collect & file: CA, Articles, latest GIS, Audited FS, mayor’s permit, Data-Privacy Registration Certificate.
Ensure disclosures: display CA number on websites, loan contracts, SMS/email templates.
Report to SEC: Quarterly Financial and Operational Reports (LFCR) via eFAST; Annual Compliance Manual certification.

10. Conclusion

Verifying a lender’s standing is no longer a mere formality; it is both a statutory duty (for corporate partners) and a first line of defense (for consumers) in a market where unlicensed online lending proliferates. The process is straightforward—two databases and, when in doubt, a certified true copy request—but failure to do so can void contracts, expose directors to criminal charges, and cost borrowers millions in illegitimate interest.

Disclaimer: This article is for educational purposes only and does not constitute legal advice. For specific concerns, consult a licensed Philippine attorney or contact the SEC Corporate Governance and Finance Department.

Appendix A. Sample Certificate of Authority (Key Elements)

Certificate of Authority No.: L-2025-123
Company Name: FastCash Lending Corp.
Date Issued: 15 January 2025
Address: Unit 1203, 12/F North Tower, XYZ Bldg., Makati City
Scope: Consumer loans ≤ ₱50 000 per borrower; max tenor 180 days
Signed: J. Emilio Aquino, Chairperson, Securities and Exchange Commission

Appendix B. Quick Reference—SEC Links (August 2025)

SEC Licensed Lending & Financing Companies List: sec.gov.ph/lending-companies
Public Advisories: sec.gov.ph/public-information/advisories
eSPARC Search (beta): espapp.secexpress.ph
SEC Express System (Document Request): expresssystem.sec.gov.ph

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