The EDC Networking Committee on Financing came up with a Financing Directory aimed to assist the micro, small and medium enterprises (MSMEs) have the option to choose the right financing program suited for their needs. The said directory is a compilation of different loan programs describing their eligibility criteria, requirements and other loan mechanics and processes from commercial banks, government financing institutions, other financing alternatives, venture capital (for start-up businesses), etc. Please note that the directory is based on currently available information and maybe subject to change by the concerned financing institutions/entities.
The said directory can be downloaded from the EDC website: www.edc.net.ph/ncf-updates. GTM
Access to finance has been a perennial problem of the country’s MSMEs. Many financing programs were developed by government financing institutions to assist them in growing their businesses, ship their products, develop new products, attend trade shows, etc. The latest of these many programs is SB Corporations’ (SBCorp) COVID-19 Assistance to Restart Enterprises (CAREs) program to micro and small enterprises for them to recover from losses that their businesses incurred during the pandemic. All loans from the CAREs program are interest-free and payment starts after six (6) months upon release of the loan and is payable within 18 to 30 months.
Meanwhile, the medium enterprises whose businesses were also affected by the lockdown clamors to be included in the special loan facilities of government financing institutions in the country. Ms. Mila Lacson, representing and championing the cause of her sector – the Holiday Décor & Giftwares, specifically called the attention of SBCorp as their applications for financial assistance under the CAREs program were denied for the reason that their companies are medium enterprises. Hence, the sector appealed that they should also be given financial assistance by the government, citing that they are more capable to pay dues, pay higher taxes and generate more jobs than their micro and small enterprise counterpart. Continue reading SBCorp to fund the medium enterprises in the country
The Small Business Corporation’s (SBCorp) CAREs (COVID-19 Assistance to Restart Enterprises) Program is part of the government’s economic relief program for micro and small enterprises affected by the COVID-19 pandemic. Ms. Luna Cacanando, SB Corp President and Chief Executive Officer informed that the Department of Trade and Industry (DTI) has allocated P1.5 Billion loan program to help cushion the economic impact to businesses brought about by the pandemic. This was proclaimed during a zoom meeting last 28 May 2020, organized by the Philippine Exporters Confederation, Inc. (PHILEXPORT) to help the agency in the dissemination of information for the said program.
Under this loan program, existing micro and small enterprises (MSEs) can tap the assistance to restart their businesses after they have been affected by the lockdown measures undertaken by the government to contain the spread of the Corona virus.
Micro enterprises with asset size not exceeding PHP3 million can borrow between Php10,000 up to Php200,000. Small enterprises with assets not exceeding PHP15 million can borrow up to Php500,000. Moreover, the loan is interest free or zero-interest for 30 months but SBCorp. will charge 6% as service fee. In addition, SBCorp. will also give six-month grace period to micro and small businesses hence, loan payment commences on the 7th month. However, if by then business is yet to recover, the exporters request for possibly longer grace period of at least 12 months before it start their loan payment.
In order to help facilitate the roll out of the CAREs loan program, SBCorp partnered with PHILEXPORT and allocated P300 Million as loan fund relief for the latter’s members. The two are set to sign the Memorandum of Understanding for the partnership and guidelines in the coming days.
Under this partnership, PHILEXPORT is to endorse the list of member/exporters qualified to apply for a loan and SBCorp is only to collect 6% deducted upon the loan release. The 6% consists of a 5% service fee for processing the loan and the 1% to be given back as admin fee to the chapter or association that facilitated the approved loan application.
Finally, it was also informed that Congress is set to finish the Philippine Economic Stimulus Act (PESA) bill where a Php100Billion was allocated to also provide zero-interest. –GTM
Due to the continuing rise of confirmed COVID-19 cases and the scarcity of medical devices and Personal Protective Equipment (PPEs) the Department of Trade and Industry (DTI) through its lending arm- the Small Business Corporation (SBCorp) felt the need to augment the critical supply gap and significantly reduce the risks and serious threat posed by COVID-19 to the health and safety of the Filipino people, particularly the medical frontliners. With these in mind, DTI and SBCorp recognized the importance of providing immediate funding assistance to small and medium enterprises (SMEs) who are manufacturing COVID-19 specific medical devices and personal protective equipment (PPEs).
As such, in order to provide the much needed funding assistance, the DTI and SBCorp requested the Office of the President in line with the special power granted to it under RA No.11469 the “Bayanihan to Heal As One Act” to:
1.) Reallocate P500 Million from the P1.5 Billion P3 fund under the FY2020 General Appropriations Act (GAA) to provide funding assistance to SMEs manufacturing COVID-19 specific medical devices and ppes; and
2.) Provide for a maximum loan size of P30 Million to the said SMEs on the condition that loans exceeding P5 Million will require third party evaluation from a government financial institution such as the Development Bank of the Philippines (DBP) or the Land Bank of the Philippines (LBP).
Meanwhile, SBCorp will continue with its Pondo sa Pagbabago at Pag-asenso (P3) Program, the country’s flagship program for providing economic and employment opportunities to micro enterprises through the encouragement of entrepreneurship. DTI through SBCorp has been implementing the P3 program since 2017 through a fund downloaded by the National government to SBCorp via the GAA. The P3 program provides micro enterprises that do not have the access to formal credit and with asset size not exceeding Php 3 Million. The program can be easily accessed by micro enterprises at reasonable cost (0.5% interest) with a grace period of 6-months (and can be extended) and minimal requirements- Barangay Certificate and Barangay Clearance. In addition, the program is expected to lure micro enterprises away from usurious loans provided by loan sharks and other informal money lenders.
Another P500 Million was set aside as Enterprise Rehabilitation Fund (ERF) for micro entrepreneurs once the ECQ is lifted with loans up to P200,000. A month-long pilot run in May will be done in Luzon with a nation-wide roll-out aimed by June. In summary, a total of P1.5 Billion for MSMEs were set aside by the DTI. These were all discussed in detail by Ms. Luna Cacanando, SBCorp President, during the second eForum series on #ResilienceAndRecoveryPH conducted via zoom on Wednesdays, 3:00 pm to 5:00 pm by the Philippine Exporters Confederation, Inc (PHILEXPORT) in collaboration with the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines e(ECOP) and the Philippine Disaster Relief Foundation (PDRF).
For more details on the DTI-SBCorp funding programs, you may call their hotline at 1-800-10-651- 3333 (8am-5pm) or visit Sbcorp Dti facebook page.- GTM
President Duterte signed last month, Republic Act No.11057 or the Personal Property Security Act (PPSA) to boost access to credit and financing for the country’s micro, small and medium enterprises (MSMEs), including exporters as well as farmers and fisherfolks. This means that banks and other financial institutions will now accept account receivables, inventory, warehouse receipts, crops, livestock, machinery and equipment, vehicles and even deposit accounts.
In the past, banks and other financial institutions prefer traditional collateral such as real estate or land for loan applications. As these assets are hard to come by for MSMEs, bank loans were often only accessible to and obtained by larger corporations. But with the new measure, land titles would now cease to be the sole requirement for securing bank loans.
By expanding the said list, the government is promoting an increase in economic activity of the MSMEs which redounds to better businesses, more revenues and more jobs for the Filipinos.
Further, the law also provides for the establishment of a unified, centralized online notice-based collateral registry that is lodged in the Land Registration Authority (LRA) to provide protection and more confidence to banks and financial institutions in lending to MSMEs and the agriculture sector. Such collateral registry will serve as a centralized digital record for personal properties being used as collateral, thus, allowing banks to make sure that their applicants’ collateral will not be used for more than one loan application.
In addition, the passage of the law is expected to improve the country’s position in the Getting Credit indicator of the Ease of Doing Business Survey of the World Bank.
Finally, with a sustained effort from the government and private sector partners, the country will surely achieve a more competitive and sustainable economic growth through a reformed and secured transaction system in the country. (GTM)
To address the need of the export sector for innovative financing options, factoring and crowdsourcing platforms were introduced in a seminar conducted by the Department of Trade and Industry- Export Marketing Bureau (DTI-EMB), in collaboration with the Export Development Council and PHILEXPORT under the Philippine Export Competitiveness Program (PECP).
Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivables, i.e., invoices to a third party (called a factor) at a discount. Factoring is not the same as invoice discounting. Factoring is the sale of receivables, whereas invoice discounting is a borrowing that involves the use of accounts receivable assets as collateral for the loan. Export factoring on the other hand, is a package that encompasses credit protection, export working capital financing, foreign accounts receivable bookkeeping and collection services. The financier (factor, which usually are the banks) will purchase accounts receivable of invoices, which are raised once the seller (exporter) ships the goods to the buyer. Factoring was discussed by Mr. Etienne Von de Bogaert of the Eurofin Asia Group Pte Ltd., a company based in Singapore.
Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet. Crowdfunding offers a chance of success for MSMEs by showcasing their businesses and projects to the entire world. Crowdsourcing was discussed by Mr. Edison Tsai of New Union.
DTI-EMB regularly conducts these information sessions through its Philippine Export Competitiveness Program (PECP)featuring current concerns of exporters. For more details and updates on topics, contact DTI-EMB at telephone number 465-3300 loc. 109 or email to email@example.com.-Grace T. Mirasol
The Philippine National Bank (PNB), one of the country’s largest private local commercial banks, launched the Small Enterprise Virtual Card for Small Enterprises last 06 March 2017. This new loan facility is fully operational starting 25 March 2017. It is PNB’s financing innovation to SMEs who are looking for additional capital for their business expansion.
Continue reading PNB launches new credit facility for SMES