Small and medium-sized enterprises (SMEs) with at least one-year experience in export transactions can apply for interest-free government loans to meet their shipping freight costs requirement and thrive despite the pandemic.
Lourdes Rosario Baula, head of the Financing Sector of SB Corporation, said the agency responded to the call raised by Sergio R. Ortiz-LUis Jr., president of the Philippine Exporters Confederation Inc. (PHILEXPORT) for government to provide a quick-response fund from where exporters may draw money to advance the freight cost once a booking has been made with a shipping line.
“The increase in freight rates and cost of raw materials resulted in the increase of total production cost. With this scenario, the local exporters have to compromise their profit margin to meet export sales target and to keep their businesses afloat,” she said.
Baula said eligible for financing are all types of projects of a qualified SME exporter affected by both enhanced and general community quarantine declarations.
She said eligible borrowers are SMEs with asset size of P3 million and not more than P100 million, and must be at least one year as an exporter with at least three consummated purchase orders (POs) or letter of credits (LCs).
On the loan amount, Baula said a one-year credit line will be granted within the Covid-19 Assistance to Restart Enterprises (CARES) program threshold limit of 15 percent of sales based on Bureau of Internal Revenue (BIR)-filed financial statements (FS) for 2019 and 2020.
“From there, we will compute 15 percent of the sales that will be the (credit) line that we can provide you but up to P5 million only is the limit,” she told exporters in mixed English and Filipino.
Baula said loan availment shall be up to 20 percent of presented confirmed PO or LCs, adding the 20 percent is the estimated shipping freight cost.
She added that borrower SME exporters will only need to pay a service fee of 1 percent for a 30-day term, 2 percent for 60 days, and 3 percent for 90 days.
Baula said the processing of the application for the credit line takes two to three work weeks.
“But for the processing of loan release, usually it is not immediate. (But) unless there is really an immediate need, we can process it within seven days,” she said.
Baula said crediting of loan proceeds to the borrower will be through Instapay or Pesonet.
Bayanihan CARES is an interest-free and collateral-free financing program that aims to assist micro, small and medium enterprises (MSMEs) recover from the adverse effects of the pandemic.
For applicants with existing loans under the CARES program, Baula said loans under the facility for shipping cost shall be on top of existing ones as long as within the threshold loan limit policy.
“We already partnered with PHILEXPORT, there were some exporters that were able to avail our CARES program. We already have (your) record with us. For this (new) facility, we are still open to assisting you and giving you additional loans,” she said.
Meanwhile, Baula said the SB Corp. can amend the features of the lending program should there be a demand for such loans from the micro enterprises with asset size of less than P3 million.