To support micro and small businesses affected by the spread of the coronavirus disease 2019 (COVID-19) in the country, the Small Business Corporation (SBC) of the Department of Trade and Industry (DTI) is setting up a P1-billion Enterprise Rehabilitation Financing facility under the “Pondo sa Pagbabago at Pag-asenso” (COVID-19 P3-ERF).
The loan facility will be implemented once the community quarantine declaration is lifted by the national government and/or by the respective local government units.
Trade Secretary Ramon Lopez said the P3-ERF facility is part of the economic relief program of President Rodrigo Duterte for small businesses greatly affected and further marginalized by the COVID-19 pandemic.
“The ERF loan fund is open to micro and small enterprises with at least one-year continuous operation prior to March 2020.”
SBC which is an agency under the DTI said 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 a drastic reduction in sales during the pandemic.
Micro enterprises with asset size of not more than P3 million may borrow P10,000 up to P200,000, while small enterprises with an asset size of not more than P10 million may borrow a higher loan amount but will not exceed P500,000.
The loan shall be used to help the enterprise stabilize or recover from its losses.
The loan shall be used to help the enterprise stabilize or recover from its losses. Specifically, the following purposes are qualified: updating of loan amortizations for vehicle loans or other fixed asset loans of the business; inventory replacement for perishable stocks damaged, and working capital replacement to restart the business.
The interest rate shall be at 0.5 percent per month (discounted basis), and a grace period on payments shall be given until such time that the economic crisis has abated.