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

SME Unified Lending Opportunities For National Growth (SULONG)

Program Title: SME Unified Lending Opportunities For National Growth (SULONG)
Program Objectives:

• To simplify and standardize the lending procedures of government financial institutions (GFIs) thereby enhancing the SMEs access to needed funds;
• To shorten the list of documentary requirements to further facilitate the lending process;
• To create a wider, borderless financing system that will afford the SMEs greater access to short- and long- term funds; and,
• To lower the effective cost of borrowing by SMEs and liberalize the requirements.

Eligible Borrowers:

• Enterprises in all industries except trading of imported goods, liquor, cigarettes, and extractive industries; and,
• Enterprises that are at least 60% Filipino owned, whose assets are valued at not less than P3.0 Million, but not more than P100.0 Million, excluding the value of the land, or subject to ownership rules as defined under existing Philippine laws for specific industries.

Loan Purposes:

• Short-Term Loans - For export financing (export packaging credit) or a credit line for temporary working capital
• Long-Term Loans - For permanent working capital, purchase of equipment or lot, or construction of a building/warehouse

Terms/Requirements:

Amount:

• Short-term Loans - Up to 70% of the value of the LC/PO (export packaging), or 70% of working capital requirement (temporary working capital); maximum P5.0 M
• Long-term Loans - Up to 80% of the incremental project cost; maximum of P5.0 M

Interest Rates:

• The participating GFIs will charge the same rate for the program based on a regular review.
• Rates of loan releases until January 31, 2006:
  • Short-term loans - 9.5%
  • Medium-term loans - 13.8% for loans of up to 3 years; 14.5% for loans over 3 years to 5 years
• Interest rates are revised periodically.

Maturity / Repayment:

• Short-term loans - Maximum of one year .
• Long-term loans - Maximum of five years, inclusive of a maximum one year grace period on principal monthly amortization

Security: The program will not decline a loan only on the basis of inadequate collateral. However, the borrower must be willing to mortgage any available business and personal collateral, including assets to be acquired from the loan, to secure the borrowing. The following are acceptable collaterals:

• Registered/unregistered REM/CHM
• Assignment of life insurance
• Assignment of LC/PO or sales invoice (for export packing loans)
• For franchisees, the following may be considered:
  • Corporate guarantee
  • Assignment of lease rights

Program Partners: Development Bank of the Philippines (DBP), National Livelihood Support Fund (NLSF), Philippine Export-Import Credit Agency (PhilEXIM), Quedan Corporation (Quedancor), and Small Business Corporation (SB Corporation).

Contact Details:

Program Management Department (PMD)
Phone:    (02) 522-0000,  (02) 551-2200 locals 2650, 2589
Direct Line:   (02) 405-7309/7427
Fax: (02) 528-8541/42/43
Email: sme-pmu@mail.landbank.com