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Sunday, September 26, 2021

Lifelines for year-old firms

SMALL Business Corp. (SB Corp), the financing arm of the Department of Trade and Industry, is planning to offer a new financing program targeted at startups next year, a local authority said.

SB Corp Corporate Executive Officer Emilio Taganas said the program will cater to micro, small, and medium enterprises (MSMEs) whose operations have lasted at least one year, preferably suppliers, manufacturers, and service providers.

“We’re planning to have that and hopefully offer it next year so more of our SMEs, those that have just started, will have the chance to grow their business,” Taganas told Sun.Star Cebu at the sidelines of the opening of a Negosyo Center in the town of Dalaguete last week.

Taganas said that SB Corp operates using a risk-based approach to SME lending, which means it does not look at collateral as a major consideration for the approval of SME loan applications, but rather looks at the borrower’s quality and debt servicing capacity.

Government’s financing arm for MSMEs offers microfinance wholesale lending to its partner rural banks, microfinance institutions, and cooperatives. It also offers wholesale lending to SMEs through partner financial institutions.

In addition, SB Corp provides direct lending facilities to manufacturers, suppliers, traders, exporters, franchisers, and service providers. The interest rate, according to Taganas, will vary as it will depends on the borrower’s profile.

SB Corp in 2014 helped revive small business communities in Yolanda-affected areas, through the Enterprise Rehabilitation Fund (ERF) with its fast-tracked loan processing that offered low interest rates to affected MSMEs.

In that year, SB Corp approved a total of P598 million in loans to 482 enterprises under the ERF. In northern Cebu, most that have availed themselves of ERF were poultry operators and resort owners.
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