23Feb/09282
SME-FORCE (Financing Organizationally Competent and Excellent Franchise Business)
Program Title: SME-FORCE (Financing Organizationally Competent and Excellent Franchise Business)
Program Objectives: A direct lending facility to support various players in the franchising industry, including franchisors, franchisees and suppliers of franchisor-firms.
Eligible Borrowers:
- Filipino-owned enterprise; in the case of corporation, must be at least 60% Filipino-owned;
- Franchisor firm must be a member in good standing of AFFI or
- PFA;Asset size not less than P500.000 and not more than P100 Million (excluding the value of land);
- For non-start ups, latest BIR-filed net income must be at least P10.000; and,
- Project to be financed not into farm-level agri-aqua production, extractive activities or vice-generating operations.
Types of Borrower:
- Start-up or Expanding Franchisee
- Expanding Franchisor
- If financing is for the establishment of company-owned outlet for possible resale to franchisees: At least 2 profitable years in the franchise business with at least 1 profitable franchisee outlet; and, At least 2 existing company-owned outlets with 2 years profitable experience.
- If financing is for the establishment of Commissary Hubs - at least 2 profitable years in the franchise business with at least 2 profitable franchise outlets.
- Start-up Franchisor
- At least 2 years profitable experience in the line of business subject for franchise development
- At least 2 company-owned outlets
- Supplier of Franchisor
- Supplier - 2 years track record with the franchisor
- Franchisor - at least 2 years profitable years and 1 profitable franchise outlet
Loan Purposes:
- Fixed Asset Acquisition
- Building construction/improvement
- Equipment/vehicle acquisition
- Lot acquisition (limited to 25% of total loan)
- Working Capital o Permanent
- Temporary - financing of PO issued by franchisor firms
- Loan Refinancing (except for loans from other government financial institutions)
Terms/Requirements:
Amount:
a. For start-up or expanding franchisee
- Minimum of P200,000
- Maximum of P5.0 Million for small enterprises and P10.0 Million for medium enterprises
- Maximum of 70% of project cost; franchise fee to be strictly financed by equity
b. Expanding franchisor
- Establishment of company-owned outlet for possible resale to franchisees - maximum of 70% of project cost but not more than P3.5 Million per outlet financed
- Establishment of Commissary Hubs- Limited to 50% of project cost of first commissary hub, if still to be set up- Up to 70% of project cost for already existing commissary hub or for succeeding commissary hubs.
- Start-up Franchisor- maximum of P750,000 or 70% of project cost
- Supplier of Franchisor:
- Up to 70% of the PO net of franchisor's deposit
- Maximum credit line of P3.0 Million
Interest Rate:
- Fully Secured Loans
- 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 10 x of BIR-filed net income
Service 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; monthly or quarterly amortization
- Transactional or One-year Credit Line - up to 180 days term per drawdown
Security:
- Start-up or Expanding Franchisee
- At least 50% franchisor's Corporate Guarantee on the franchisee-borrower's loan; or
- Equivalent titled REM and/or CHM on motor vehicle
- Expanding Franchisor
- At least 50% REM and/or CHM on motor vehicles; and,
- Assignment of rights of outlet to be financed
- Start-up Franchisor - 70% secured by REM and/or CHM on motor vehicles
- Supplier of Franchisor
- May be clean up to P1.0 Million
- At least 25% hard collateral if loan is more than P1.0 Million
- MOA between SBC and franchisor on direct payment to SBC.
Basic Documentary Requirements:
- 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
- Franchise agreement and business plan, in case of start-up franchisee
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
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