MSMEs, startups urged to avail financing aid programs for commercialization

Micro, small and medium enterprises (MSMEs), startups, and beneficiaries of a government technology upgrading program can avail of a wide range of financing assistance to expand their businesses or start exporting, with funds to be provided shall be refunded at zero interest and without collateral.

Matthew Bryan Villanueva, science research specialist at the Department of Science and Technology’s Technology Application and Promotion Institute (DOST-TAPI), said there are five programs of assistance for commercialization for them which have a maximum funding of P1 million to P5 million.

Villanueva said these include venture financing programs (VFPs) for startup and technology-based projects, environmentally-sound technologies, and commercialization of DOST generated/funded technologies, purchase order (PO) financing program, and level-up innovation government support for technologies against the spread of coronavirus disease 2019 (Covid-19).

“Our MSMEs can choose (a program) and apply based on their commercialization needs.We know that sometimes they need capital for raw materials and equipment, to scale up their production capacity, or need new technology to produce new goods and become more competitive in the market. That is why, TAPI has developed programs to address the needs of the MSMEs,” he said in Filipino in a webinar.

Villanueva said the financing scheme for the commercialization programs requires the proponent to shoulder at least 30 percent of the total project cost, while TAPI covers the 70 percent.

He said eligible MSMEs, start-ups, and beneficiaries of Small Enterprises Technology Upgrading Program (SETUP) interested to avail of these programs can submit proposals until April 29, 2022 at 5 p.m.

Villanueva said MSMEs that commercialize DOST-generated technologies
as evidenced by a valid technology licensing agreement (TLA) can apply for the venture financing with TAPI providing a maximum assistance of P5 million.

“We incentivize our local businesses to adopt DOST-funded or DOST-generated technologies. Aside from equipment purchase or fabrication, the program can cover those for local and international standard certifications,” he added.

He said those applying for international standards certificate should provide proof of international market potential such as freedom-to-operate analysis or search in target countries, patent cooperation treaty application if applicable, international sales contract if available, and letters of intent, among others.

Villanueva said the VFP for startup and technology-based projects assist MSMEs, sole proprietor or corporation or partnership or cooperative, and intellectual property (IP)-based or technology-based firm with potential for IP application to enhance viability and competitiveness of their businesses by providing financial aid of up to P2 million to purchase or fabricate equipment.

“So here in this program, the equipment that will be purchased or fabricated should be emerging or innovative technologies that can really improve production efficiency or improve product quality,” he said.

Villanueva said the venture financing for environmentally-sound technologies (VFEST) supports MSMEs that adopt locally developed environment-friendly technologies.

“The maximum assistance of TAPI is P2.5 million to purchase or fabricate environmentally friendly equipment… What is important in the VFEST program is that the purchase of equipment can help clean the environment and help us comply with environmental regulations or laws,” he added.

Villanueva said qualified beneficiaries of SETUP, programs of TAPI and other DOST agencies, and adopters of DOST-Research and Development Institute (RDI) technologies can particularly apply for the PO financing program to advance the cost of raw materials to facilitate the POs of their clients.

SETUP is a banner program of the DOST that was established in 2002 to help enhance the competitiveness of the local MSMEs by introducing science and technology-based interventions.

He said the Ligtas Covid-19, on the other hand, covers the cost of raw materials to deliver unserved POs but products applying for the program are intended for mitigation of the coronavirus.

Villanueva said funds to be provided under the PO financing program have a maximum of three months to refund and three months grace period. Those under the Ligtas Covid-19 program should be refunded up to 12 months and six months grace period.

Under the three VFPs, beneficiaries have a maximum of three years to refund and six months grace period.

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