Green Financing Forum April 29, 2013Bohol Tropics Resort, Tagbilaran City, Bohol

A government corporation created in January 1991 under R.A. 6977 and amended under R.A. 9501 known as the Magna Carta for Micro, Small and Medium Enterprises (mSMEs).

Mandated to provide financing initiatives for mSMEs.

Commenced its operations on July 16, 1992.

On November 2001, SBGFC and the Guarantee Fund for Small and Medium Enterprises (GFSME) were merged through Executive Order No. 28 and became known as the Small Business Corporation or SBC.

About Small Business Corporation

An attached agency of the Department of Trade and Industry (DTI) and is under the policy, program and administrative supervision of mSME Development Council.

In 2002, SBC played a key role in the drafting of the SME Development Plan, and is one of the lead agencies implementing the National SME Agenda.

Today, SBC is the National Government’s third largest provider of mSME financing, with a lending portfolio of P3.30 Billion.

About Small Business Corporation

An Analysis on SMEs

The FinancingPoint of View

DevelopmentSolutions

from

and

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1 Information asymmetry ( lack of information on SMEs at various levels - industry, regional andcompany ).

SMEs are high risk due to:• Limited capital flexibility• Vulnerability to market changes• Inadequate management capability• Short business/industry track record

Inferior collateral offering

Problems in SME Financing( From the Point of View of the Banks )

2 High transaction cost of loan packaging/ administration relative to mostly low loan-absorptive capacity of SMEs

43

1Long processing time and poor service

High interest rates

Problems in SME Financing( From the Point of View of SMEs )

2 Voluminous documentation

Largely inaccessible, as offered by banks due to:• High loan floor, effectively barring SEs• Nature/size of collateral requirement• Years of business experience required

3

1

Non-Bankable but Promising SMEs

2 Near Bankable SMEs

Already Bankable SMEs

Types of SMEsThe FinancingPoint of View

from

SBC MSME Credit Delivery Strategy

Direct Lending

for MSMEsCredit

Guarantees for SMEs

Wholesale Lending for SMEs

Wholesale Micro-Finance

Start-Up

Micros

Graduating Micros

Pre-Bankabl

e but Viable MSMEs

Near Bankable

SMEs

Bankable SMEs

Pre-Enterprise Micros

Global

Competitiveness

With MFI capability

building supportWith enterprise

registration support

PROGRAMS

Financing Facilities with SBCorporation

1. Direct Retail Lending Facilities

2. Wholesale Lending Facilities

Facilities:SBC’s Direct Lending Program

1. Fixed Asset Financing – amortized term loan for asset acquisition

2. Working Capital Financing – Amortized term loan and one year credit

line for various working capital requirements

FIXED ASSET FINANCING

(Amortized Term Loan for Asset Acquisition)

WORKING CAPITAL FINANCING

Amortized Term Loan and Credit Line for Various Working Capital Requirements

Minimum - P200 Thousand

Maximum – up to P8 Million (Credit Committee; maybe higher but needs Board approval)

• The project’s market potential and debt-servicing capacity serve as the most critical basis for determining the loan amount.• Maximum Loan-equity ratio of 90:10 as long as borrower’s debt equity ratio does not exceed 70:30

Loan Amount

Fees

Minimum – 8.50%Maximum – 16.00%

Interest rate setting is based on:• Borrower Risk Rating• Collateral cover• Term of loan

Interest Rates

Fees

Evaluation Fee (shall be deducted from the approved loan) - ½ of 1% of approved loan but not less than P3,000

Processing Fee- ½ of 1% of loan release

Out-of-town Processing Fee- P2,000 to P4,000 depending on the distance or

equivalent air fare

Commitment Fee (P4,000)

- In a form of dated check which shall be collected during the first project visit and shall be deposited to the account of SBC within one month once the loan is approved

- Shall be deducted from the required fees upon loan availment - Shall be forfeited in favor of SBC in case of non-availment

- Shall be returned in case of loan denial

Other Fees

Basic Documentary Requirements

Accomplished Business Loan Application Form (with recent ID picture)

Notarized Client Information Sheet

Latest In-House Financial Statements

Latest ITR with BIR-filed Financial Statements

Registration Papers

Location Map of the Project

Sample financed projects with environmental impact

- Fiber resin-based product exporters

- Animal feed processors

- Water distributors

- Food processors

- Lime processing (with limestone quarrying)

- Resorts

HEAD OFFICE 17th & 18th Floors 139 Corporate Center139 Valero St. Salcedo Village, Makati

CityTel. No. : 751-1888Fax No. : 894-1677 or 8135726Website : www.sbgfc.org.ph

SBC Offices

VISAYAS OFFICESVISAYAS GroupUnit 802-B Keppel CenterCebu Business Park, Cebu CityTel. No. : (032) 232 – 1200Telefax No. : (032) 415 - 8280

ILOILO DESK OFFICE

c/o DTI Region 6 Mezzanine Floor DTI Bldg., JM Basa cor. Peralta St., Iloilo

CityTelefax. No. : (033) 509-

8413

TACLOBAN DESK OFFICE

c/o DTI-Region 8 Nacida Bldg.Government Center, PawingPalo, LeyteTelefax No. : (053) 323-8385

BACOLOD DESK OFFICE

c/o DTI - Negros Occ.3F Prudential Life BldgSan Juan – Luzuriaga Sts.Bacolod CityTelefax No. : (034) 704-2203

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Grow Your Business !! with

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