SMALL and Medium-sized Enterprises (SMEs) are not out of the woods yet. Despite the improved vaccination rate and relaxed quarantine restrictions, a lot of SMEs are still in dire need of assistance to help them recover their losses and to sustain their operations.

But there is hope. For example, the restaurant industry which has been one of the hardest-hit sectors by the Covid-19 pandemic, is now seeing a "resurgence" or what they call "revenge dining that might happen next year." This was shared by Resto PH President Eric Teng during a recent forum of the Philippine Chamber of Commerce and Industry.

But he said that there is still need a lift like "tax breaks, tax holidays and other remedial packages" which, if offered by the local and national government, can go a long way toward allowing them to "reinvest in our own businesses or in our industries."

The private sector, particularly financial institutions, knows a thing or two about this. During the onset of the pandemic, banks have been offering specific types of assistance to many business groups to meet their financing needs. This is despite the fact that the banks have also been negatively impacted by the global health crisis.

The Organization for Economic Co-operation and Development-an intergovernmental economic organization-wrote in its November 2020 study titled, Financing SMEs and Entrepreneurs: An OECD Scoreboard Special edition: The impact of Covid-19, noted that governments and monetary authorities across the globe provided liquidity relief on an unprecedented scale through various efforts.

The authors of the report said: "Survey data indicate that, thanks in part to interventions such as credit guarantee schemes or monetary policy action to keep funding costs for banks very low, credit held up in many regions of the world in the first half of 2020, in some cases increasing to meet rising demand."

In the country, the Bank of the Philippine Islands (BPI) is among the financial institutions that were quick to pivot towards continuity and resiliency during the pandemic to benefit its clients and people.

For SMEs in particular, BPI offered flexible business solutions that are designed to help owners sustain their businesses during these challenging times. Their financial products-such as business loans-paved the way for small and medium-sized businesses to adjust to the needs of the market and the needs of their enterprises for cashflow.

Resiliency planning

BPI Business Banking Head Eric Luchangco said while many are probably hesitant to avail of loans given the uncertain economic environment, some have considered this as part of resiliency planning.

As of June 2021, BPI's Business Banking segment has served more than 115,000 Business Banking clients and released a total of P33.8 billion in loans.

"Beyond providing loans and financial services, we actively support our customers in navigating the pandemic with free webinars to help them reinvent and rebound. Around 1,700 SME clients have attended our BizTalk Online webinars this year, learning about topics that revolve around economic outlook, cashflow management and entrepreneurship in the digital economy," said Luchangco.

BPI offers relevant financing programs to address the current needs of SMEs for recovery. Through its Merchant Loan program for businesses in malls or commercial areas, and Business Franchise Financing loan for franchisees, SMEs can gain access to working capital which does not require any collateral from the borrower, and with minimal documentary requirements.

One example of how much financial services can amplify entrepreneurial savviness is CJ Guido Paguio, the owner of Guido's Garage Kitchen (GGK) and GGK Asian Food Mini Mart, who was able to reinvent and even grow his business during the pandemic.

GGK is a car wash stop by day and a restaurant by night. During the lockdown, they had to close the restaurant for seven months.

"My main priorities at that time were our staff who lost their jobs and sources of income, and finding ways to settle my payables. I was motivated by these challenges to find a way to start the GGK Asians Food Mini Mart to sell food essentials and needs," said Paguio. It was during this time, that BPI reached out to him and offered a business loan proposal.

"The loan enabled me to put up a branch in Magalang, Pampanga. The shop became a hit with customers, and people started asking about franchising. Now, we have grown to six branches in Magalang, Mabalacat, and Angeles. Even if we suffered during the pandemic, with the help of BPI, I was able to recover and help more people by providing them with jobs in the different branches of my shop," he said.

It is still a long road to recovery. But with innovative offers and financial services such as these, the road signs toward recovery have become more reassuring for our brave SMEs.

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