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

SME-FRIEND (Financing Research for Exporters Thru Network Development)

Program Title: SME-FRIEND (Financing Research for Exporters Thru Network Development)

Program Objectives: A direct lending facility for exporters that are members of industry associations. The object of credit is the exporter's purchase order from its foreign buyer.

Eligible Borrowers:

• Filipino-owned enterprise; in the case of corporation, must be at least 60% Filipino-owned;
• Asset size of not less than P500.000.00 and not more than P100.0 Million (excluding the value of land);
• May be a start-up exporter but at least one year track record inclusive of domestic market operations;
• Positive BIR-filed net income for the past immediate year;
• Project to be financed not into farm-level agri-aqua production, extractive activities or vice-generating operations; and,
• Must have the following capabilities, as certified by the endorsing industry association:
  • Proven track record for good quality and timely export deliveries;
  • Right kind and size of facilities, equipment, technology and manpower to complete the export orders to be financed; and,
  • No potential or existing labor problem that may interfere with the export business.

Loan Purpose: The following may be financed:

• Export Letter of Credit (L/C)
• Export PO issued by a FOBAP member foreign buyer
• Export PO issued by a non-FOBAP member foreign buyer with whom the exporter had at least three (3) completed export orders

Types of Loan:

• Transactional
• Export Packing Credit Line (can be given after one paid SBC-financed transaction with the same foreign buyer)
• Standby Credit Line
  • Approved by SBC prior to the actual export order
  • Initially up to P1.0 Million and may be on a clean basis
  • Loan amount may be upgraded should the export order go beyond the approved standby credit line, subject to simplified evaluation by SBC

Terms/Requirements:

Amount:

• Minimum of P200,000
• Up to 70% of the face value of export LC/PO
• Initially up to P2.0 Million credit line if covered by export LC
• Initially up to P1.0 Million if stand-by credit line
• Up to P8.0 Million after five (5) paid SBC loans

Interest Rate:

• Fully Secured Loans - 9.5% per annum
• Partially/At least 50% Secured Loans - Plus 1.0 % point
• Partially/Less than 50% Secured Loans - Plus 2.0 % points

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:

• Maximum of 180 days term per drawdown
• Repayment is based on LC/PO expiry date, with allowance for the collection period

Security: Real Estate Mortgage or Chattel Mortgage on motor vehicle.

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
• Photocopy of the export order

Endorsement Requirement (any one):

• Foreign Buyers Association of the Phils. (FOBAP)
• Center for International Trade Expositions and Missions (CITEM)
• Philippine Exporters Confederation, Inc. (PHILEXPORT) - for Visayas and Mindanao Exporters

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