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DBP RESPONSE – MSME Recovery (Retail Lending)

The DBP RESPONSE to accelerate MSME Recovery (DBP RESPONSE-MSME RECOVERY) is a sub-program of DBP RESPONSE created in compliance to the Republic Act No. 11494 or known as the Bayanihan to Recover as One Act directing the Development Bank of the Philippines (DBP) to introduce low interest and/or flexible term loan program for operating expenses available to businesses affected by the COVID-19 pandemic, particularly that priority shall be given to those engaged in agri-fishery and non-essential businesses, including but not limited to, start-ups and cooperatives

Eligible Borrowers

Any duly registered micro, small and medium enterprises that are existing or new clients of DBP engaged in agri-fishery and non-essential services with preference for medium enterprises, including start-ups and cooperatives.

Eligible Loan Purpose

For working capital requirements (short term or permanent) to finance the operating expense of the business to ensure continued operations.

Eligible Criteria

Existing Clients

      • Currently operating with one (1) year track record of profitable operations pre-COVID.
      • Loan is in current status pre- and during COVID-19 pandemic;
      • In case of restructured account, the borrower has not violated any terms and conditions of the restructured loan;
      • No new adverse information;
      • Leverage position and debt servicing capability prior to the pandemic were acceptable based on existing Bank policy.

New Clients

      • With acceptable financial ratios prior to the COVID-19 pandemic;
      • No existing loan with other financial institutions for the same purpose;
      • No adverse findings on the borrower/principal
      • With well-defined source of repayment
      • Track record of at least 3 years profitable business. For start-up companies, at least one (1) year operation is required.
      • Positive/favorable outlook of the industry
      • Leverage position and debt servicing capability prior to the pandemic were acceptable based on existing Bank policy.
      • Debt-to-Equity (D/E) ratio of 70:30.

Credit Facility

Term Loan

Loanable Amount

Loan amount is up to 100% of the one (1) year cash operating expense based on 2019 audited and/or BIR stamped financial statements or the annualized 2020 interim financial statement whichever is higher.

Interest Rate

3% per annum fixed for three (3) years subject to the following conditions:

    1. 100% employee retention within a period of one (1) year based on the total number of employees. The one (1) year period is reckoned from date of loan approval.
    2. Additional 1% per annum on the interest rate if employee retention falls below 100% within a period of one (1) year.

Grace Period

Maximum of twelve (12) months grace period on principal only.

Loan Tenor

Maximum of three (3) years including grace period.

Loan Security/Conditions

No collateral requirement for loan amounting to three million pesos (Php3,000,000.00) and below.

For loans more than Php 3,000,000.00, collaterals may be any or combination of the following:

      1. Real estate mortgage;
      2. Chattel mortgage;
      3. Assignment of insurance/surety/guarantee coverage acceptable to DBP;
      4. Assignment of supply contract/receivable;
      5. Continuing Suretyship (JSS) or Co-makership;
      6. Hold-out on deposit;
      7. Post-dated check covering loan amortization;
      8. Other security arrangements acceptable to DBP.

Mode of Release

Lump sum

Standard Fees

Services Fees – waived
GRT – for the account of the borrower
DST – for the account of the borrower

Minimum Documentary Requirements

General Requirements

      1. Letter of Intent
      2. DBP Application Forms
      3. Data Privacy Consent Form
      4. Copy of Updated Income Tax Return (ITR), duly stamped as received by the Bureau of Internal Revenue (BIR), together with the supporting financial statements, as applicable (in accordance with BSP Circular No. 855, s. of 2014)
      5. Bureau of Internal Revenue (BIR) Audited Financial Statement for 2019
      6. Interim Financial Statement
      7. Two (2) copies of valid government-issued IDs with pictures.
      8. Latest Business Permits (Mayor’s Permit and Barangay Permit)
      9. Latest SSS Contribution Collection List (form R3) prior to loan application, to serve as basis for number of employees prior to the pandemic (for this purpose, the proof of payment to SSS of employee benefits in December 2019 is required)

Specific Requirements for Sole Proprietorship

      1. Certified True Copy of DTI Registration

Specific Requirements for Partnerships

      1. Certified True Copy of SEC Registration
      2. Latest General Information Sheet and/or additional documents to fully establish beneficial owners of the legal entity
      3. Partnership Resolution authorizing the business relationship and the signatory to sign in behalf of the entity

Specific Requirements for Corporations

      1. Certified True Copy of SEC Certificate of Registration
      2. Certified True Copy of Articles of Incorporation and By-Laws
      3. Latest General Information Sheet and/or additional documents to fully establish beneficial owners of the legal entity
      4. Board Resolution duly certified by the Corporate Secretary, or equivalent document (e.g. Secretary’s Certificate), authorizing the business relationship and the signatory to sign in behalf of the entity.

Specific Requirements for Cooperatives

      1. Certified True Copy of CDA Certificate of Registration
      2. Certified True Copy of Articles of Incorporation and By-Laws
      3. Bio-data of incumbent officers and Board of Directors with photocopy of valid government-issued ID
      4. Board Resolution duly certified by the Corporate Secretary, or equivalent document (e.g. Secretary’s Certificate), authorizing the business relationship and the signatory to sign in behalf of the entity
      5. List of shareholders/cooperative members with their shareholdings

For start-up business and for loan amount below Php 3Million, the following documentary requirements may be submitted in lieu of ITR and BIR-stamped FS:

      1. Proof of billing for business and residence;
      2. Copy of last six (6) months Current Account Statements

If annualized 2020 interim FS shall be the basis of the loan amount, the following additional documentary requirements shall be submitted:

      1. Payroll and supporting 2020 SSS monthly contribution collection list (form R3);
      2. Paid Utilities;
      3. Rent/Lease Rentals, if applicable;
      4. Other supporting documents to support OPEX requirements.

Additional documents may be requested by the Bank to facilitate proper evaluation of the borrower.

Specific Terms and Conditions

    1. For existing clients, full Credit Investigation (CI) is not required. However, updated bank checkings is required prior to loan release.
    2. For new borrowers, CI shall be conducted using the following:
      • Negative File Information System (NFIS) for loans up to   Php 1 Million
      • NFIS and Loan Information System (LIS) for loans above Php 1 Million but not to exceed Php 3 Million.
      • For loans above Php 3 Million, full CI report may be deferred subject to the conduct of NFIS and LIS. Loan release may only be made upon receipt of favorable results of full CI report.
    3. Retail borrowers under this program will automatically be assigned a Watchlist status, thus, BRR is not needed. However, account officers may secure approval of the recommended BRR from CRMD if deemed necessary.

Submission of latest SSS Contribution Collection List (form R3) of the borrower one year from the loan release date in order to validate compliance to the required 100% employee retention.

Download Brochure

For inquiries, feel free to contact:

Mgr. Gracely Lux G. Itum
Program Officer
Program Development and Management II Department
(02) 818-9511 local 2330
glgitum@dbp.ph; pdm2-lpdu@dbp.ph

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