Loan facility set up for small, microenterprises

A state-owned company under the Department of Trade and Industry (DTI) is opening a P1-billion loan facility that will be made available to micro and small companies when the quarantine is lifted.

Small Business Corp. is setting up the fund under a loan program called Pondo sa Pagbabago at Pag-asenso, which the Duterte administration had earlier launched to help small businesses and prevent them from resorting to loan sharks.

The facility is called P3-ERF (enterprise rehabilitation financing), according to a recent DTI statement.

Trade Secretary Ramon Lopez said this was part of the economic relief program of the President for small businesses affected and further marginalized by the pandemic.

The ERF loan fund is open to micro and small enterprises with at least one-year continuous operation prior to March 2020, and whose businesses suffered drastic reduction in sales during the ensuing epidemic.Microenterprises with asset size of not more than P3 million may borrow P10,000 up to P200,000.

Small enterprises with asset size of not more than P10 million may borrow a higher loan amount but should not exceed P500,000.

The loan should be used to help the enterprise stabilize or recover from its losses, the DTI said.

Businesses can avail themselves of the fund to update the amortization of their vehicle loans or other fixed asset loans of the business, inventory replacement for perishable stocks damaged, and for working capital to restart their ventures.

Interest rate is 0.5 percent per month. The DTI said that a grace period on payments would be given until such time that the economic crisis had abated.