Financing Programs Loans and Financing Programs for Micro, Small and Medium Enterprises

SME-FLEXIBLE (Financing for Variable Business Expansions)

Program Title: SME-FLEXIBLE (Financing for Variable Business Expansions)

Program Objective:   A direct lending facility for domestic enterprises to sustain, expand or improve their business operations.

Eligible Borrowers:

• Filipino-owned enterprise, in the case of corporation must be at least 60% Filipino-owned
• Asset size not less than P500,000 and not more than P100.0 Million (excluding the value of land)
• At least one year in operation
• Positive income for the past immediate year with BIR-filed net income of not less than P10,000
• Project to be financed not into farm-level agri-aqua production, extractive activities or vice-generating operations
• Latest financial ratios (based on in-house financials)
  • At least 1:2 current ratio
  • At most 70:30 debt-equity ratio

Loan Purposes:

• Fixed Asset Acquisition
  • Building construction/improvement
  • Equipment/vehicle acquisition
  • Lot acquisition (limited to 25% of total loan)
• Working Capital
• Loan refinancing (except for loans from other government financial institutions)

Terms/Requirements:

Amount:

• Micro-enterprise - minimum of P200,000; Maximum of P1.5 Million
• Small Enterprise - up to P5.0 Million
• Medium - up to P10.0 Million
• Loan amount must not exceed:
  • 70% of the project cost (30% must be in equity of the borrower
  • 2X of networth of the borrower (based on latest in-house financial statement)
  • 5X of net income of the borrower (based on latest in-house financial statement)

Interest Rate:

• Fully Secured Loans (p.a.)
  • Up to 1 year - 9.5% per annum
  • U to 3 years - 13.8% per annum
  • Up to 5 years - 14.5% per annum
• Partially/At least 50% Secured Loans - Plus 1.0 % point
• Partially/Less than 50% Secured Loans - Plus 2.0 % points
• Additional premium on loan amounts exceeding 10x of BIR-filed net income

Service Fees (to be deducted from loan proceeds; no front-end fees):

• Evaluation Fee - 1/2 of 1% of approved loan but not less than P3,000
• Processing Fee - 1/2 of 1% of loan release
• Out-of-town processing fee
  • None for Metro Manila, Cebu and Davao
  • P2,000 for the CALABAR and Region 3 provinces
  • P4,000 or actual air fare for the rest of the country

Maturity / Repayment:

• Term Loan - maximum of 5 years, with up to one year grace period on principal; amortization is monthly or quarterly
• Transactional or One-Year Credit Line - up to 180 days term per drawdown

Security:

• Fixed assets to be financed by the loan must form part of the collateral. In case assets to be financed cannot be collateralized as in the case of leasehold improvements, there should be a substitute collateral.
• •     In case of working capital loans, must be at least 80% secured by hard collateral (real estate which may be commercial, residential or agricultural, and to motor vehicles).

Documentary Requirements Upon Loan Application:

• Accomplished business loan application form (with picture)
• Notarized Client Information Sheet
• Latest in-house and BIR-filed financial statements
• Business registration papers Applicable endorsement
• Location map of the project

Endorsement Requirement:

• DTI-Provincial Office
• SBC-accredited industry association
• No need for endorsement for enterprises based in NCR, CALABAR provinces, Bulacan, Davao and Cebu

Contact Details:

Small Business Corporation (Small Business Guarantee and Finance Corporation)
17th & 18th Firs, Antel Corporate Centre
139 Valero Street, Salcedo Village, Makati City

Direct Lending Program
Ma. Luna C. David
QIC - Finance and Guarantee Sector
Phone: (02) 751-1888
Fax: (02) 813-5726, 894.1677
Email:   ldavid@sbgfc.org.ph