MSME Financing Programs | Small Business Corporation

CORPORATE FUNDED

REGULAR RETAIL PROGRAM
- Direct lending to registered micro, small and medium enterprises (MSMEs). The program is intended to bridge the financing gap of what we refer to as the “pre-bankable but viable” MSMEs that are at the moment “unserved” by the banking system. Through this program, we hope to provide a conducive environment for the MSMEs by financing their business needs, training them to get credit track record and experience, and building up business size necessary to access bank financing in the future.
- Direct lending facilities are available for manufacturers, suppliers, traders, franchisers, and service providers.
MINIMUM BORROWER QUALIFICATIONS:
- At least 60% Filipino-owned;
- With asset size of not more than P100.0M exclusive of value of land where project is located;
- Must have at least 2 years profitable business track record
- DTI or SEC registered, whichever is applicable;
- Not belonging to SBC’s exclusionary list of industries:
  - Farm level production involving agriculture, aquaculture and/or livestock (post production activities are however qualified);
  - Real estate development (MSME contractors are however qualified);
  - Pure trading of imported commodities (unless value-added services are employed which impact positively on the domestic market);
  - Vice-generating activities
1. FIXED ASSET FINANCING
  1. Loan Purpose:
    - Building/Production area improvement
    - Service / Delivery Vehicle
  2. Repayment Term: up to 3 – 5 years depending on the loan purpose
  3. Collateral: Real Estate Mortgage or Chattel Mortgage
2. WORKING CAPITAL FINANCING
  1. Loan Purpose: AR and/or Inventory financing for micro and small enterprises who are:
    - Not yet ready for a credit line transaction
    - Prefers to amortize its working capital loan
    - Most probably do not have a working accounting system/recording system
  2. Type of Loan: 1-Year Credit Line
  3. Subject of Financing: 80% Receivables; 60% of Inventories

FOR MORE INFORMATION CONTACT OUR RETAIL LENDING TEAM

+63 2 7751 1888 local 1635 (South Luzon and NCR)
(082) 221-1488 (Mindanao)

II. REGULAR WHOLESALE PROGRAM

1. SME WHOLESALE
  Rediscounting window for SME sub-borrowers who are able to meet the following criteria:
  
  MINIMUM QUALIFICATIONS OF SME SUB-BORROWERS:
  1. At least 60%Filipino-owned;
  2. DTI or SEC registered, whichever is applicable;
  3. With positive net income for the immediate past year based on BIR-filed FS;
  4. DER not exceeding 80:20;
  5. Not belonging to SBC’s exclusionary list of industries:
    - Farm level production involving agriculture, aquaculture and/or livestock (post production activities are however qualified);
    - Real estate development (MSME contractors are however qualified);
    - Pure trading of imported commodities (unless value-added services are employed which impact positively on the domestic market);
    - Vice-generating activities
2. GRADUATING MICRO WHOLESALE Lending window for graduating micro-enterprise sub-borrowers who are able to meet the following criteria:
  1. At least 60%Filipino-owned;
  2. Any valid business permit (e.g. Mayor’s Permit, BMBE Registration);
    - Positive net income for the immediate past year and as of period
    - DER not exceeding 80:20
  3. Total loans inclusive of with PFI’s is not more than P500,000;
  4. Not belonging to SBC’s exclusionary list of industries:
    - Farm level production involving agriculture, aquaculture and/or livestock (post production activities are however qualified);
    - Real estate development (MSME contractors are however qualified);
    - Pure trading of imported commodities (unless value-added services are employed which impact positively on the domestic market);
    - Vice-generating activities
3. MICROFINANCE WHOLESALE
  1. Micro-Lead – for MFIs whose loan portfolio and organizational structure is at least 60% MF
  2. Micro-Local – for MSME-oriented rural banks

III. VENTURE CAPITAL PROGRAM

- - - Objective
      Provide an equity financing to start-up enterprises with high growth potential to develop the business, commercialize and grow their products and services in a sustainable manner.
    - ELIGIBLE
      Duly registered MSME, organized either as a single proprietorship, partnership or corporation. For enterprises registered as a single proprietorship, the form of ownership must be converted and registered as a corporation.
    - AREAS OF FINANCING
      Industrial and manufacturing, social services, agri-business, tourism, environmental
    - NATURE OF INVESTMENT
      common stocks, preferred stocks
    - AMOUNT OF INVESTMENT
      Amount shall not exceed 40% of the enterprise authorized capital stock. It shall range from a minimum of P500,000 to a maximum of P5,000,000
    - TERM OF INVESTMENT
      Shall be for a period of 5 to 10 years. It may be extended for another 2 years subject to approval of SB Corp BOD
    - EXIT MECHANISM
      Redemption, sale to third party, IPO

NATIONAL GOVERNMENT FUNDED

P3 LENDING PROGRAMS

Designed to be lent out to micro enterprises borrowers with asset size not exceeding P3.0M at not more than 2.5% per month all-in interest rate and service charges. This 2.5% monthly cap is an effective rate, based on diminishing balance of the principal portion of the loan.

1. P3 RETAIL – REGULAR
  - Any self-employed or micro entrepreneur engaged in legitimate livelihood or business activity for at least one year can borrow fromP3
  - The micro entrepreneur should have a government-issued ID
  - The micro entrepreneur should have been issued a Barangay Clearance in the past 3months
  - Evidence of micro enterprise activity for at least one year (certification by LGU and/or other government offices is acceptable among others
    Proof of one (1) year residence
  - Loan Amount: P5,000.00 to P200,000.00 depending on the size of the business and the ability to pay. For enterprises with at least one (1) employee, beneficiary can borrow up to P200,000.00. The fund should be used for the enterprise’s expansion and/or additional supplies of the business.
  - Interest Rate: not more than 2.5% per month
2. P3 RETAIL – SPECIAL FACILITIES (KIA/WIA, MARAWI, BORACAY, OMPONG, REBEL RETURNEES)
  *Special considerations are being applied for P3 Implementation of Special Facilities
3. EQUITY INVESTMENT FOR FAMILIES OF KIA/WIA WITH MICRO ENTERPRISE
  - Providing micro enterprise investments for families of KIA/WIAs from P50T to P100T. The investment is interest free if paid within two years. If not, amortization will start on the third year with an interest of 2% per annum.
  QUALIFICATIONS OF MICRO ENTERPRISE INVESTEE:
  - May be start-ups as DTI will support the KIA/WIA family with trainings and starter-kits.
  - With AFP certification on KIA/WIA status of the soldier
  *All the KIA/WIA investees will be required to accomplish and submit on monthly basis a simple monitoring template on the progress of their business; they will be taught by SB Corp on how to accomplish the form.
  
  LOAN FEATURES:
  - Loan Limit: Up toP100.0T
  - Repayment: Being an equity investment, the KIA/WIA family-micro enterprise will return the fund invested by SBCorp once grow this achieved enough to start an amortization of the fund. The investment shall be interest free if returned within two years; otherwise a 2% p.a. fee is to be charged on the investment.

P3 WHOLESALE

Partner Accreditation Criteria:

- Should have license to engage in lending
- At least 1 year operating as an MFI
- Minimum Capitalization: At least P500T
- Net Income is positive for the past 12 months
- Microfinance Portfolio at Risk: PAR – 30 days should not be more than 20% net of provisioning
- Past Due Portfolio Quality: 20% net of provisioning
- Capital Adequacy Ratio (CAR): 15%
- Debt-to-Equity Ratio (DER): Not to exceed 80:20 after loan
- Liquid Asset to Deposit Ratio: 10% but low liquidity shall not be a disqualifying factor
- Borrower Risk Rating (BRR): BRR 5 or up
- Regulating Agency: SEC, CDA and BSP

LOAN FEATURES: SB CORP. TO CONDUIT

- Credit Line Amount: Based on SB Corp. assessment
- Credit Line Term: 1 year subject to annual review
- PN Term: Up to 24months
- Repayment Term: Monthly or Quarterly
- Interest Rate: 0% on the first year; 2.0% p.a. starting 2^nd year based on diminishing balance
- Service Fee: 2.75% (Upfront to be deducted from loan proceeds)
- Grace Period/ Pre-payment Penalty/ Rebates: No grace period on principal; No pre-payment penalty; Simultaneous payment of principal and interest; No rebates
- Penalty Fee for Late Payment: 0.5% per month
- No Collateral Requirement
- Manner of Loan Release: Via bank or check
- Schedule of Loan Release:
- Advance drawdown (loan amount not yet secured by sub-PN of end- borrowers) depending on financial profile of the MFI but not to exceed 50% of the approved loan amount at any point

LOAN FEATURES: CONDUIT TO MICRO ENTERPRISE BORROWER

- - - - Loan Limit: Up to P100T to end-borrower; may be increased up to P200T for micro end-borrowers with at least one (1) full time worker
      - Manner of Loan Release/ Schedule of Loan Release/ Repayment Term/ Tenor/Collection System: Conduit free to determine
      - Interest Rate and Service Fees: Up to 2.5% per month all-in

ENTERPRISE REHABILITATION FACILITY (ERF) FOR MICROENTERPRISESFacility under the P3 program that covers all natural and man-made calamities that adversely affect microbusinesses in vulnerable areas. This will be a quick response for efficient mobilization of loan funds for immediate recovery and rehabilitation of microenterprises in the event of natural disasters.

COVERAGE

Disasters brought about by the following natural calamities- typhoon, earthquake, volcanic eruption, flood, tsunami, tornado, drought and other effects of climate change
Man-made disasters- fire, war, and terrorism
Areas and sectors to be financed must be declared under the state of calamity or reported by the NDRRMC to be severely devastated

APPLICABLE LOAN GUIDELINES

Existing lending guidelines under the P3 retail lending shall apply with the following . However, since this loan facility aims to provide immediate relief to rehabilitate affected MEs, special loan terms will be implemented as follows:

ELIGIBILITY CRITERIA

should have an ongoing registered business or livelihood activities for at least one year prior to the calamity, and that the business was severely damaged by the disaster
may be a start-up business for victims of war or terrorism and those who are displaced by the disaster, and have either relocate their business or start a new business venture
loan applicant’s regular membership with a credit delivery partner Coop is not required

LOAN PURPOSE

purchase of assets that will produce sales/new inventories
replacement for repair of fixed assets
financing of restructured loans arising from the calamity

LOAN AMOUNT

Maximum of P200,000 by micro end-borrower subject on the following limits:

up to P50,000 for first time borrower without PDC
up to P200,000 for first time borrower with PDC

INTEREST RATE

Up to 1.5% effective interest rate per month or 18% per annum (all inclusive)
for loan applications financed through the CDP coops, the whole interest charges should will go to the coop as service fee

REPAYMENT TERMS

- - - - payable up to 24 months, subject to monthly amortization
        
        grace period- after six months (for principal only)

Complete List of P3 Partner Financial Institutions (MFIs)

P3 Provincial Coordinators

SUCCESS STORIES – a collection of stories of P3 borrower

P3 SUCCESS STORIES SERIES – PHILIPPINE STAR

2017 NATATANGING P3 MICROENTERPRISES