I agree with declaring taxes to the BIR – this would show the earning capacity of the business. Which is 1 of the requirements of banks.

But I think most small to medium scale icafe owners would defer on that and instead approach less formal lending channels – I do know several people who have deferred on this and instead went to Indian Lending Institutions. I. L. I. (hehehehe)

Well, life is like that, we have to continuously adapt or else we will be dinosaurs.

But what I am saying is, an i-café owner who really earns from his operation must declare his accurate income and pay the correct amount of taxes. In so doing, the financial institutions would see that there is income in his operation of an i-café so the possibility that they would lend him money for his expansions will be there. That will, of course, depend on how much money from his current operation could be used to defray the loan amortization.

As it is now, many i-café owners won’t even venture registering with BIR. There are those already registered but the question is, do they declare their real income. What will be the basis of the financing institution in determining the profitability of their operations if they are not declaring their correct income in the first place.

Please do correct me if I am wrong, but in accounting, electronic equipment is classified under “consumables”. Their value degrades over time. That’s why in assessing the value of an Internet Cafe, it will only go down. It can’t go up.

Even if you bought new equipment, 1 year pa lang severely depreciated na ang value.

My admittedly far fetched indirect solution: Put your Internet Cafe in your home and use the real property as collateral. Long shot but thats the only way for you to secure a loan. iCafes is a dying business model because of cheap Korean desktops, cheap netbooks and cheap wireless internet access

There would always be places where Internet Cafe demand would still be strong. But the volume of the demand for them will steadily decrease.