ARQCapital, a leading provider of strategic capital and operational support to Philippine SMEs, continues to make significant strides in transforming the local business landscape. Founded in 2014, the company has successfully deployed billions of pesos to fuel the growth of numerous small and medium enterprises (SMEs) across various sectors.
Established by a group of visionary entrepreneurs, including Edmund Solilapsi and Abigail Tan, ARQCapital emerged to address a critical gap in the Philippine market: the lack of accessible and flexible financing for SMEs. Starting with an initial fund of PHP 50 million in 2016, ARQCapital has since grown into a multibillion-peso business, providing strategic capital and operational support to a diverse range of SMEs.
With modest ticket sizes of PHP 1-5 million (USD 20k-100k), ARQ was a nimble player in a niche market. Although it began as a small, experimental venture, it has since grown to become a multibillion-peso business. Currently, ARQ has deployed approximately PHP 2.5 billion (~USD 50 million) in capital, serving approximately 50 clients with an average ticket size of PHP 50 million (~USD 1 million). A single transaction now accounts for the company’s first fund size, which has grown impressively.
There is more to ARQ’s journey than just numbers. It represents a fundamental shift in how credit is provided to Philippine SMEs, which have traditionally lacked access to scalable capital solutions. As a “smart capital” provider, ARQ provides SMEs with financial support along with strategic and operational support, helping them transition from local players into strong contenders.
Today, ARQ manages around PHP 800 million (~USD 15 million) in assets under management and has over 20 active clients. Their ability to look beyond traditional lending sets them apart in the crowded field of SME finance. “We offer more than just capital,” says Solilapsi, “we bring corporate finance expertise, strategic advisory, and a unique combination of credit and private equity perspectives.”
In terms of its investments, ARQ often acts more like a partner than a lender. “Our mission is to bridge SMEs to the next phase of their growth, not to keep them with us indefinitely,” Solilapsi adds.
Over the past two years, ARQ has evolved from being a smart capital provider to a sustainability-conscious nonbank financial institution (NBFI). The pivot was driven by a growing demand for responsible investing in the Philippines. In addition to ticking boxes, ARQ is taking real steps to integrate environmental, social, and governance factors into its investments.
One example is their SheSecure program, a partnership with Investing in Women, an initiative led by the Australian government. Women-owned or woman-led businesses in the Philippines will receive PHP 300 million (USD 6 million) under the program, directly contributing to the UN’s Sustainable Development Goals.
The partnership with Haus Talk Inc., an affordable housing provider in the Philippines, has also been one of ARQ’s most significant milestones. Haus Talk’s 10-hectare Laguna project, “The Granary,” has been financed by ARQ since 2022. But what sets ARQ apart from other financiers is the way it structures deals. In addition to providing capital, ARQ helped Haus Talk acquire a PHP 1 billion property from Liberty Flour Mills, further cementing its affordable housing footprint.
“When completed, this will be Haus Talk’s largest project to date,” said Solilapsi. “This is what smart capital is all about—helping our clients achieve milestones that would otherwise be out of reach.”
Where does ARQ see itself in the next decade? The team has big plans. “We want to be the go-to institutional debt partner for promising SMEs in the Philippines,” Tan states. As part of the vision, sustainability-linked products will be rolled out and high-impact sectors like clean energy, agriculture, and affordable housing will be targeted.
But growth won’t come easy. Philippine SMEs face the biggest challenge of balancing growth with financial stability. Even the best-laid plans can be derailed by thin balance sheets and delayed payments from clients. ARQ launched its “Expert Elevate” program to help SMEs improve their financial management skills.
The Philippine private credit market is still in its infancy, but ARQ anticipates a future in which private alternatives, particularly private credit, will become a reliable, institutionalized option for both SMEs and large corporations. A shift to more structured, formalized private credit options is already taking place, with ATRAM launching the country’s first Corporate Debt Vehicle in 2023.
One of ARQ’s most transformative projects was the funding of a 20MW solar project in Pangasinan in 2020. By retaining full ownership, one of their portfolio companies Cleantech can build its track record without diluting equity. This single project led to a joint venture with AC Energy for a 200MW project and eventually a commitment from BlackRock for a 1GW solar pipeline. “This is the kind of multiplier effect we strive to create,” said Tan. “It’s about using strategic capital to unlock exponential growth.”
ARQ doesn’t seem to be slowing down. Their ambitions are clear: to reshape the country’s financial landscape by being more than just a lender. It is ARQ’s goal to set the standard for private credit in the Philippines by focusing on high-impact sectors and integrating ESG principles.