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RETAIL LENDING PROGRAM > Working Capital Financing > Short-Term



REVOLVING WORKING CAPITAL LOANS

Credit Line for Financing of
Receivables and Inventory

Program Description

A short-term direct lending facility of Small Business Corporation, which aims to further address the working capital needs of the small and medium enterprises (SMEs). This facility supports the enterprise’s gapping of receivables and build up of inventory.

  • Facilities

    • Demand Loan – a credit line facility intended to better address the working capital needs of SMEs that are pre-bankable in terms of collateral and of credit track record with the banks, but are mature in terms of a well-established accounting system and have the capability to submit regular financial reports.

    • Transition Credit Line– a variant of the Demand Loan Facility intended for accounts receivable and/or inventory financing but this time for SMEs who are not yet eligible under the Demand Loan facility since they do not have a working accounting system. This is a transition facility to develop borrowers to eventually qualify under the Demand Loan facility.

  • Minimum Borrower Qualification

    • Must be a Filipino-owned enterprise; in the case of corporation, must be at least 60% Filipino-owned.
    • Must have an asset size of not less than P3 Million and not more than P100 Million, excluding the value of land.
    • Business Track Record

      • Demand Loan – At least three years positive business track record.
      • Transition Credit Line - At least two years positive business track record.

    • The MSME industry involved should not be among the following exclusionary list of SBC:

      • Farm-level crop or livestock production (post-harvest operations are qualified)
      • Real estate development (SME contractors are qualified)
      • Pure traders of imported goods
      • Engaged in vice-generating operations

  • Borrower Risk Rating (BRR)

    • Demand Loan – BRR score of “4” or better per SBC evaluation
    • Transition Credit Line - BRR score of “5” or better per SBC evaluation

  • Accounting System

    • Demand Loan – must have a working accounting system acceptable to SBC
    • ransition Credit Line - must be willing to set up a working accounting systemwithin the term of the credit line.

  • Product Features

Type of Facility

Demand Loan – One-Year Credit Line
Transition Credit Line – Six-month temporary Credit Line

Purpose of Loan

Financing of receivables and/or inventory

Loan Amount
  • Minimum of P200,000
  • Up to 70% of computed working capital requirement as assessed by SBC
  • Up to P10 Million for enterprises with asset size of at least P15 Million per BIR-filed FS
  • Up to P5 Million for small enterprises
  • Up to P2 Million for new borrowers (may be higher in meritorious cases)

 

Repayment Term
  • Up to 180 days per drawdown, but not to exceed the expiry date of the credit line
  • Interest payable monthly or quarterly

 

Under Demand Loan:

  • Payable upon demand by SBC
  • Required to pay-off 20% of principal balance upon maturity of PN

Collateral Requirement

Assignment of receivables and/or inventory in case of Demand Loan; must be at least 80% secured by hard collateral in the case of Transition Credit Line

Other Loan Terms

Demand Loan

  • As part of loan monitoring covenants, borrowers must submit its latest quarter financial statements within two months after end of each quarter for the duration of the credit line. 
  • Since financing is based on the levels of AR and of inventory, SBC shall demand payment should there be a substantial decrease in the borrower’s working capital level.

 

Transition Credit Line 

  • Within the 6-month period after the granting of the loan, the borrower must start setting up its accounting system. In case of non-compliance, an extension via renewal of line for a maximum period of six months shall be allowed in meritorious cases. For borrowers who already have complied with the accounting system requirement, they shall be reviewed for the granting of a one-year credit line under the Demand Loan facility.
  • Loan availments will be made against submission of POs, receivables and/or inventory.

 

 

For more information about our products, please contact us:

Small Business Corporation
Development Finance Group
Telephone No. 751-1888
or at any SBC office nearest you.

(Link to SBC area offices directory)