In order to support micro and small businesses affected by the economic impact of Covid19 in the country, the Small Business Corporation under the guidance of the Department of Trade and Industry is setting up a P1.0 billion Enterprise Rehabilitation Financing facility under the Pondo sa Pagbabago at Pag-asenso (Covid19 P3-ERF for short). The facility will be implemented once the Community Quarantine declarations are lifted by the National Government and/or respective Local Government Units.
The ERF loan fund will have the following features:
- Micro and small enterprises with at least one year continuous operation prior to March 2020, and whose businesses suffered drastic reduction in sales during the ensuing epidemic may access the loan fund;
- Micro enterprises with asset size of not more than P3.0 million may borrow P10.0 thousand up to P200.0 thousand;
- Small enterprises with asset size of not more than P10.0 million may borrow a higher loan amount but not to exceed P500.0 thousand;
- 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;
- Working capital replacement to restart the business
- Interest rate shall be at 0.5% per month (discounted basis); and
- Grace period on payments shall be given until such time that the economic crisis has abated.
According to DTI Secretary Ramon Lopez, the P3-ERF facility is part of the economic relief program of the administration of President Rodrigo Roa Duterte for small businesses further marginalized by the Covid19 epidemic.