SMALL Business Corp. (SB Corp.) is setting up a P1-billion loan program for micro and small enterprises that have been affected by the enhanced community quarantine in Luzon.
SB Corp. in a statement on Tuesday said the enterprise financing facility, under the Pondo sa Pagbabago at Pag-asenso (P3) program, will be implemented after the community quarantine declaration has been lifted by the national government or by the respective local government units.
Trade Secretary Ramon M. Lopez said the facility is under the government’s economic relief program for businesses affected by the new coronavirus disease 2019 (COVID-19) epidemic. The P3 program was allotted P1 billion in the P27.1 billion package to respond to the epidemic.
President Rodrigo R. Duterte last week announced a month-long Luzon lockdown in a bid to contain the spread of the coronavirus disease 2019 (COVID-19), closing most private business operations and banning public transport until mid-April.
The loan is open to micro and small businesses with at least one year of continuous operations by March 2020, and whose businesses “suffered drastic reduction” during the epidemic.
Loans can be used to recover losses such as updating loan amortizations for vehicle and other fixed asset loans, inventory replacement for damaged perishable stocks, and working capital replacement to restart the businesses.
Micro enterprises with an asset size up to P3 million may borrow between P10,000 to P200,000, while small enterprises with assets not bigger then P10 million may borrow up to P500,000.
The interest rate is 0.5% per month, and payments will be on grace period until “the economic crisis has abated.”
SB Corp. is also offering a month-long moratorium on loan payments for existing borrowers.
In a separate statement, SB Corp. said loan payments covering March 16 to April 14 2020 for micro-, small-, and medium-sized enterprise (MSME) borrowers and partner financial institutions (PFI) are on moratorium.
SB Corp. recognizes the impact of this public health crisis on the economy. This measure is to help our MSME borrowers and PFIs defray their expenses and focus on providing for the needs of their employees and businesses,” SB Corp. President and Chief Executive Officer Ma. Luna C. Cacanando said.
SB Corp’s MSME borrowers and PFIs within areas under the lockdown are eligible to apply for the moratorium.
Borrowers may also request to pay only the interest portion of monthly payments for the succeeding six months, and resume regular payments after. Loan terms may also be extended, depending on the situation.
SB Corp. said that it reserves the right to impose a shorter grace period or an extension of the loan term if merited by business developments.
Ms. Cacanando said SB Corp.’s decision on each request “shall take into consideration economic realities on the ground.”
SB Corp. is the financing arm of the Department of Trade and Industry. — Jenina P. Ibañez