Wholesale Lending for SMEs
  Accreditation System
  Partner Banks
  Program Performance
  Wholesale Loan Products
    SME FAST
    SME FIRM
    Structured Financing
  Special Tie-Ups
  Interest Rates
  Program Manager and Account Officers
• Credit Guarantee Program
• Retail Lending Program
• Micro Financing Program
     
 
Yearly, SBC recognizes its bank partners for excellent participation
under its SME Wholesale Lending and Credit Guarantees Program.
 
WHOLESALE LENDING PROGRAM > SME FIRM

 

1.0 Define SME FIRM Facility (Funding Investments in Regional Markets)

SME FIRM is a wholesale lending window where SB co-funds with eligible financial institutions various enterprise projects of small and medium entrepreneurs (SMEs) through on-lending and rediscounting facilities (based on funding structure of at most 90% from SBGFC).

It is a direct financial intervention to banks and NBFIs that are into SME lending, and impacts SMEs by ensuring liquidity in the local financial system for SME credit, granting banks better cost efficiency, and opening up more SME credit opportunities.

SME FIRM loans are wholesale medium-term loans. The credit facility’s recourse is with the bank/ NBFI and the SME is the sub-borrower.


2.0 Mode of access

1. On-lending 2. Rediscounting
SBGFC co-funds an enterprise project, and the AFI releases the loan proceeds to SME borrower within seven days from date of SB approval. Such constitutes a drawdown and shall be evidenced by SME FIRM promissory note. SBGFC rediscounts SME promissory notes bearing not less than one year term. Notes with medium-to-long term up to a maximum term of seven years are eligible.

3.0 Facility requirement for banks

A bank should be first accredited with SBGFC and granted an Omnibus Credit Line which must be current at the time of borrowing.

For further information on how to apply for accreditation, please click on and browse “bank accreditation” link

4.0 Facility’s eligibility requirements for sub-borrowers

On-lending mode Rediscounting mode
  • Sub-borrower loan should be at least P 100 thousand
  • The sub-loan must still be for release to SME at the time of borrowing

 
  • Sub-borrower’s purpose of loan should be:
    1. permanent working capital
    2. fixed asset acquisition
    3. plant construction or
    expansion
  • Sub-borrower must have:
    - At least two years of profitable operations
    - Latest current ratio of at least 1.2:1
    - Latest debt to equity ratio of at most 80:20
    - Inventory level within industry standard
    - Latest account receivable level of at most six months
  • Should capitalize at least 20% of total project cost
  • Debt servicing capacity of greater than 1.0 (Net income prior to loan plus depreciation and interest expense over loan amortization of all loans, short-term loans amortization limited to interest)

Common requirements

  • Sub-borrower must not be a branch/ division or subsidiary of a large enterprise (with assets of more than P 100 million)
  • Must not be a DOSRI loan
  • Must not be currently funded under other wholesale lending program either partially or wholly
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The sub-loan/s must be pre-released to SME, existing and in current status at the time of borrowing, and with no restructuring done prior to SBC funding
 
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5.0 Facility’s terms and conditions

On-lending mode Rediscounting mode
  • Maximum funding shall be up to 90% of loan amount and not to exceed P 15 million
  • SME FIRM loan shall have a term of at least one year to a max. of 7 years depending on loan purpose
  1. Permanent working capital-Up to five years with six month grace period on principal repayment
  2. Fixed asset acquisition- Up to seven years with one year grace period on principal repayment
  3. Combined with permanent working capital not exceeding 50% of total loan –
    Up to max. term of the fixed asset component
  • Repayment shall be either monthly, quarterly or semi-annually
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6.0 Acceptable collateral

From the SME sub-borrower

  1. Real estate mortgage with at least 50% loan value relative to loan amount
  2. Unencumbered/ hold-out deposits equal to loan amount (SB Circular 169, Series of 2004)
  3. Machinery and equipment used in production that must fully secure a loan if REM is less than 50% of loan
    (Open only for universal and commercial banks and Platinum accredited banks, and all other banks with CAMELS Rating of “3.5” as of latest BSP bank examination, per SB Circular 179/179-B as amended)
  4. Tax declarations but loan valuation of not more than 40% or P 500,000.00, whichever is lower (SB Circular 179/179-B as amended)

From the bank

  1. Deed of Assignment with Recourse on all rights, interests and/ or titles over the rediscounted notes
  2. Deed of Undertaking with Custodianship, if applicable (to ensure that the conduit bank has control of original collateral documents)

7.0 Availment stage

If the conduit bank is ready to avail, please contact Vice President Hector M. Olmedillo of Luzon- Institutional Markets Finance Group or Hermi Pormento, Department Manager at 751-1888 local 1732.

For Visayas and Mindanao Operations Managers, please click on “program managers and account officers”