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DBP RESPONSE – MSME Recovery (Retail Lending)

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.

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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