PROGRAM PRESENTATION

PROGRAM PRESENTATION

PROGRAM PRESENTATION

July 2007 version

A government corporation created in January 1991 under R.A. 6977 known as the Magna Carta for Small Enterprises.

Mandated to provide financing initiatives

for Micro, Small and Medium Enterprises or 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.

About Small Business Corporation

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 SME Development Council.

In 2002, SBGFC 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, SBGFC is the National Government’s third largest provider of SME financing, with a lending portfolio of P2 Billion.

Has over 3,000 MSME clients, 71 partner financial institutions, and serving 61 of the 81 provinces across the country.

About Small Business

Corporation

About Small Business

Corporation

SBC MSME Credit Delivery Strategy

SBC MSME Credit Delivery Strategy

Direct Lending

for MSMEs

Credit Guarantees

for SMEs Wholesale Lending for SMEs

Wholesale Micro-

Finance

Start-UpMicros

Graduating

Micros

Pre-Banka

ble but

Viable

MSMEs

Near Banka

ble SMEs

Bankable

SMEs

Pre-Enterprise

Micros

Global

Competitive

ness

With MFI capability building support

With enterprise

registration support

Minimum Borrower Qualifications Minimum Borrower Qualifications

Must be FILIPINO-OWNED - at least 60% Filipino-owned in the case of corporations

Must be FILIPINO-OWNED - at least 60% Filipino-owned in the case of corporations

Must NOT be engaged in: - Farm-level crop or livestock production (pre and post-harvest operations only)

- Purely trading of imported goods

- Vice generating activities - Real estate development (SME contractors are qualified)

Must NOT be engaged in: - Farm-level crop or livestock production (pre and post-harvest operations only)

- Purely trading of imported goods

- Vice generating activities - Real estate development (SME contractors are qualified)

The SBCDirect Lending Program


Must be an SME with an ASSET SIZE of: - Not less than P500 Thousand- Or not more than P100 Million, excluding the value of land

Must be an SME with an ASSET SIZE of: - Not less than P500 Thousand- Or not more than P100 Million, excluding the value of land

Must have at least 1 YEAR PROFITABLE BUSINESS TRACK RECORD

- Start-ups and/or those with less than 1 year track record can be considered only under Financing for Start-Ups and Receivables Financing

Must have at least 1 YEAR PROFITABLE BUSINESS TRACK RECORD

- Start-ups and/or those with less than 1 year track record can be considered only under Financing for Start-Ups and Receivables Financing

Minimum Borrower Qualifications Minimum Borrower Qualifications



Must have a BRR SCORE of “5” or better

Must have a BRR SCORE of “5” or better

Borrower Risk Rating (BRR) SystemWhat is it about?

Borrower Risk Rating (BRR) SystemWhat is it about?

The BRR System is an instrument used to help The BRR System is an instrument used to help control credit risks; it helps SBC to identify and control credit risks; it helps SBC to identify and mitigate areas of risk involved in extending mitigate areas of risk involved in extending financing to SME clients.financing to SME clients.

It is a risk rating model that focuses on four It is a risk rating model that focuses on four areas of concern in an enterprise: areas of concern in an enterprise:

Cash (financials)Cash (financials) - 50 pts.- 50 pts.AdministrationAdministration - 20- 20MarketMarket - 15- 15ProductionProduction - 15 - 15

100 pts.100 pts.

For an enterprise to qualify, it should at least For an enterprise to qualify, it should at least get a score of 55 points or BRR 5. get a score of 55 points or BRR 5.

This system is being implemented by SBC to This system is being implemented by SBC to have a risk-based lending approach in SME have a risk-based lending approach in SME financing.financing.

SBGFC’s Direct Lending Facilities

SBGFC’s Direct Lending Facilities

1. Fixed Asset Financing

2. Working Capital Financing

Three Facilities:

Transactional LoanSoft Investment LoanMicro Working Capital Loan

3. Financing for Start-up Enterprises

Credit Line/Case to Case Loan• Transactional Loan

Amortized Term Loan• Soft Investment Loan• Micro Working Capital Loan

Three Facilities under Working Capital Financing:

Working Capital FinancingWorking Capital Financing

Transactional LoanTransactional Loan

Target Borrowers

Exporters

Type of Loan

1-Year Credit Line

Transactional basis

Subject of Financing

Purchase Orders/ LCs

Transactional WC LoanTransactional WC Loan

Loan Amount

Up to 60% of POs, including LCs

Up to P8 Million for borrowers with SBC track record

Up to P2 Million if new borrower (may be higher in meritorious cases)

Up to P1.0 Million if stand-by export credit line

Repayment Term Collection Date of Purchase Order – up to 180 days per drawdown, but not to exceed the actual payment date of buyer

Collateral Requirement

- Assignment of LC/PO

Soft Investment Loan

Financing of soft or intangible investment requirements of the enterprise which includes:

Research and development Trade fair participation Pre-operating expenses for expansion projects Trainings Rental deposit IT software package Franchise development

Micro Working Capital Loan

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

Amortized Working Amortized Working Capital LoanCapital Loan

Amortized Working Capital Loans


Soft Investment

Loan


Loan Purpose/Subject of Financing

Financing of soft or intangible investments

Financing of receivables and/or inventory

Repayment Term

Up to 3 years Payable monthly or quarterly

Up to 3 years Payable monthly or quarterly

Loan Amount Up to 90% of the project cost Up to P500 Thousand

Up to P500 Thousand Up to 70% of Computed Working Capital Requirement

Lending Features



Soft Investment

Loan


Collateral Requirement

Must be at least 80% secured by hard collateral

Must be at least 80% secured by hard collateral

Other Loans Terms

The borrower is required to liquidate the loan including the submission of proof of disbursement such as OR, invoices, certification among others

Lending Features

Service FeesService Fees

Credit Lines *

Minimum – 9.6%

Maximum – 13.0%

*Inclusive of 1% account management fee

Credit Lines *

Minimum – 9.6%

Maximum – 13.0%

*Inclusive of 1% account management fee

(for 2nd Quarter 2007)

Amortized Term Loans

Minimum – 9.8%

Maximum – 17.0%

Amortized Term Loans

Minimum – 9.8%

Maximum – 17.0%

Interest rate setting is based on:

• Borrower Risk Rating• Collateral cover• Term of loan

Interest rate setting is based on:

• Borrower Risk Rating• Collateral cover• Term of loan

Interest RatesInterest Rates

Service FeesService 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

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

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

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

HEAD OFFICE

17th & 18th Floors 139 Corporate Center

139 Valero St. Salcedo Village, Makati City

Tel. No. : 751-1888Fax No. : 894-1677 or

8135726Website : www.sbgfc.org.ph

HEAD OFFICE

17th & 18th Floors 139 Corporate Center

139 Valero St. Salcedo Village, Makati City

Tel. No. : 751-1888Fax No. : 894-1677 or

8135726Website : www.sbgfc.org.ph

SBC OfficesSBC Offices

LUZON OFFICESLUZON OFFICES

LA UNION DESK OFFICE

La Union Trade CenterCity Hall Complex

Quezon Ave. San Fernando City, La

UnionTelefax No.: (072) 242-

7647

LA UNION DESK OFFICE

La Union Trade CenterCity Hall Complex

Quezon Ave. San Fernando City, La

UnionTelefax No.: (072) 242-

7647

BICOL DESK OFFICE

FEDMACSI Bldg., Panganiban Drive Naga CityTelefax No.: (054) 473-

9975

BICOL DESK OFFICE

FEDMACSI Bldg., Panganiban Drive Naga CityTelefax No.: (054) 473-

9975

ISABELA DESK OFFICE

Rm. 4 2nd Floor OH Commercial Bldg.

San Fermin, Cauayan CityTel. No. : (078) 652-1964

ISABELA DESK OFFICE

Rm. 4 2nd Floor OH Commercial Bldg.

San Fermin, Cauayan CityTel. No. : (078) 652-1964

SBC OfficesSBC Offices

TACLOBAN DESK OFFICE

c/o DTI-Region 8 Nacida Bldg.

Government Center, Pawing

Palo, LeyteTelefax No. : (053) 323-

8385

TACLOBAN DESK OFFICE

c/o DTI-Region 8 Nacida Bldg.

Government Center, Pawing

Palo, LeyteTelefax No. : (053) 323-

8385

ILOILO DESK OFFICE

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

CityTel. No. : (033) 335-0060Fax No. : (033) 335-0083

ILOILO DESK OFFICE

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

CityTel. No. : (033) 335-0060Fax No. : (033) 335-0083

VISAYAS AREA OFFICE

Unit 802-B Keppel CenterAyala, Cebu City Tel. No. : (032) 232 –

1200Fax No. : (032) 234 –

4500

VISAYAS AREA OFFICE

Unit 802-B Keppel CenterAyala, Cebu City Tel. No. : (032) 232 –

1200Fax No. : (032) 234 –

4500

VISAYAS OFFICESVISAYAS OFFICES MINDANAO OFFICES

MINDANAO OFFICES

MINDANAO AREA OFFICE

7th Floor Unit 76 Landco Corporate CenterJP Laurel Ave. Bajada, Davao

CityTel. No. : (082) 221 – 1488Fax No. : (082) 221 –

0858

MINDANAO AREA OFFICE

7th Floor Unit 76 Landco Corporate CenterJP Laurel Ave. Bajada, Davao

CityTel. No. : (082) 221 – 1488Fax No. : (082) 221 –

0858

CAGAYAN DE ORO DESK OFFICE

c/o DTI Region 10Corrales cor. Luna St.Cagayan de Oro CityTel. No. : (088) 231-

5703

CAGAYAN DE ORO DESK OFFICE

c/o DTI Region 10Corrales cor. Luna St.Cagayan de Oro CityTel. No. : (088) 231-

5703

GENERAL SANTOS DESK OFFICE

c/o DTI-General Santos CityOsmena South St., Gen. Santos

CityTel. No. : (083) 552-8385Fax No. : (083) 553-1032

GENERAL SANTOS DESK OFFICE

c/o DTI-General Santos CityOsmena South St., Gen. Santos

CityTel. No. : (083) 552-8385Fax No. : (083) 553-1032

Grow Your Business !! with

Grow Your Business !! with

PROGRAM PRESENTATION

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