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Small businesses looking to restart their operations during the pandemic may still apply for interest-free, collateral-free government loans by creating an account at www.BayanihanCARES.ph.
With just a few keystrokes and mouse clicks, small business owners can type in their pertinent details and upload scanned identity and business documents on the website, which is maintained by the Small Business Corporation (SBCorp), an attached agency of the Department of Trade and Industry (DTI).
SBCorp is the program implementer of the Bayanihan CARES (COVID-19 Assistance to Restart Enterprises), which makes PhP8.08 billion available for micro, small, and medium enterprises (MSMEs), cooperatives, hospitals, tourism businesses, and repatriated or displaced Overseas Filipino Workers (OFWs) affected by COVID-19 pandemic.
Under the program, qualified loan applicants can apply for loans ranging from PhP10.0 thousand up to PhP5.0 million, depending on their pre-pandemic sales and business assets figures, if applicable.
These loans are payable up to a maximum of four (4) years, inclusive of a maximum grace period of 12 months for Non-Tourism MSMEs, or a maximum grace period of 24 months for Tourism MSMEs accredited by the Department of Tourism (DOT) or registered as Barangay Micro Business Enterprise (BMBEs). Successful loan applicants will only need to pay a one-time service fee, set at a maximum of eight (8) percent for a four-year loan term. Lower service fees apply to shorter loan terms.
SBCorp also enhanced its requirements to enable more MSMEs to benefit from the highly concessional loan terms under the program. For instance, MSMEs that have been operational for at least one (1) year as of their date of application may now qualify for the loan. SBCorp’s previous requirement was for MSMEs to be operational for at least one (1) year before 16 March 2020 when the community quarantine was imposed in the country. This is in recognition of the fact while most MSMEs chose to adapt to the new operating environment, some have chosen to pivot to or establish entirely new businesses.
The Bayanihan CARES Program also has a special window for tourism and travel-related industries (CARES for TRAVEL) with a fund allocation of PhP4.0 billion, and a start-up loan program for repatriated or displaced OFWs who want to start their own businesses (CARES for HEROES).
To date, SBCorp has approved 31,700 MSME loan applications. These correspond to a total loan amount of PhP4.84 billion.
It is important to emphasize that SBCorp is focused solely on helping make funds available for small business owners, according to its President and Chief Executive Officer Ma. Luna E. Cacanando. And during the pandemic, that focus didn’t change, Cacanando said.
“SBCorp operates on the principle that we should not duplicate what the mainstream players in MSME finance are already doing,” she said. “We do not compete with what is already working in the market. What we need to do is fill in the gaps for small businesses that banks and lending companies do not yet find attractive to finance relative to their profit objectives and cost management thresholds. We develop and operate our financing programs for MSMEs along these lines.”
And just like every other organization, SBCorp has been disrupted by the pandemic.
But instead of being paralyzed by the lockdown, it was able to slowly transform itself, Cacanando said.
Between March and May last year, the organization “went through a deep rethinking on how to safely provide quick financing response to affected small businesses which we knew will increase in great numbers as the pandemic crisis is prolonged,” Cacanando said.
She added: “We had to strategize how to design, develop and fund the IT application systems and IT connectivity that we needed to put in place. The challenge was heightened by the need to limit most of our meetings to online venues, instead of the usual face-to-face environment which allows for more interactive brainstorming. And we had limited IT equipment in the beginning relative to the emerging scale of digitization required.”
Nowadays, its financing programs — including Bayanihan CARES — are fully electronic and fully operational, according to Cacanando.
As a result, the agency’s MSME borrowers no longer need to go to its offices, unless they request it.
As it celebrates its 30th anniversary this year, SBCorp looks forward to enhancing its relationship with its stakeholders, the small business owners.
“SBCorp’s greatest accomplishment to date is its attitude of oneness with the MSME sector. Together with our mother agency, the DTI, we understand the strengths and weaknesses of MSMEs, and the threats and opportunities confronting them,” Cacanando said. “Moreover, we understand our responsibility of helping level the playing field in their favor. Thus, with all modesty, we serve as their strong and able advocate.”