COVID19 Assistance to Restart Enterprises (CARES) Program under the Bayanihan 2
COVID-19 ASSISTANCE TO RESTART ENTERPRISES (CARES) PROGRAM
FREQUENTLY ASKED QUESTIONS
- What is Small Business Corporation?
The Small Business Corporation (SB Corporation) is a government financial institution that was created on 24 January 1991 under R.A. 6977, Magna Carta for Small Enterprises, as amended by RA 8289 in 1997, and RA 9501 in 2008. It has a primary responsibility of implementing comprehensive policies and programs to assist micro- small- and medium enterprises (MSMEs) in all areas, including but not limited to finance and information services; training and marketing.
SB Corporation is the financing arm of the Department of Trade and Industry (DTI). Its Board of Directors is headed by the DTI Secretary together with key officials from other government agencies.
- What is CARES Progam?
The COVID-19 Assistance to Restart Enterprises (CARES) program is a special financing facility of SB Corporation for micro and small enterprises that have been adversely affected by the COVID-19 pandemic. The Program has an initial portfolio of P1.0 Billion when it was first launched in May 2020.The CARES program offers interest- and collateral-free loans. It only charges a service fee of 4% up to 8% depending on the loan term. It provides a grace period of up to six months for regular businesses and up to 12 months for certain industries.
Upon the passage of the Republic Act 11494 otherwise known as the Bayanihan to Recover as One Act on 11 September 2020, a P10.0 billion fund was allocated to the SB Corporation to expand the CARES program that was then tagged as “Bayanihan CARES”.
Under Bayanihan CARES, P6.0 billion of the P10.0 billion fund is allocated for the tourism sector. The P6.0 billion fund is aimed to be extended to DOT- and LGU-accredited tourism-related enterprises through the program, “CARES for Tourism Rehabilitation and Vitalization of Enterprise and Livelihood or CARES for TRAVEL”.
- How to apply for a CARES loan?
- MSMEs who meet the following qualifications may apply:
- No unresolved major negative credit dealings;
- With BIR-filed financial statements (BIR 1701/1702, Balance Sheet, and Income Statement)
- Without BIR-filed financial statements
- Only online applications are accepted.Applications must be filed through this link:bayanihanCARES.ph
- CARES program is available only for micro, small and medium enterprises (MSMEs) with an asset size of:
- Micro – not more than P3.0 million
- Small – P3.0 million up to P15.0 million
- Medium – above P15.0 million up to P100.0 million
- Is co-maker/ co-borrower required?
The co-borrower requirement only applies to sole proprietorship. A co-borrower is required if the principal borrower is 66 years or above.A government-issued ID of the co-borrower must also be submitted/uploaded in the BRS upon application.
- How much loan can be availed?
Loan The loan amount to be granted will be based on the MSME applicant’s annual sales in the previous years (2018 or 2019) and asset size (inventories, machines, buildings, etc.)
- For enterprises with BIR-filed Financial Statements (BIR 1701/1702, Balance Sheet, and Income Statement) para sa taong 2018 o 2019).
- For Medium enterprises (asset size exceeding P15.0 million up to P100.0 million)
- Qualified Medium Enterprises can avail of up to P1.0 million loan;
- Subject to Credit Committee (CreCom) approval, the loan may be increased up to P2.0 million, on condition that the enterprise submits a written plan duly certified by the President/CEO on how to restart or to improve its business model; and
- Subject to CreCom determination, the loan may be increased up to P3.0 million, on condition that the enterprise submits an evidence of rehiring or retention of significant number of employees/workers at risk of permanent retrenchment without the economic stimulus fund.
- Small Enterprises (asset size exceeding P3.0 million up to P15.0 million)
- Qualified Small Enterprises can avail of up to P500.0 thousand loan;
- Subject to CreCom approval, the loan may be increased up to P1.0 million, on condition that the enterprise sbmits a written plan duly certified by the President/CEO on how to restart/re-establish or to improve its business model; and
- Subject to CreCom determination, the loan may be increased up to P1.5 million on condition that the enterprise submits an evidence of rehiring or retention of significant number of employees/workers at risk of permanent retrenchment without the economic stimulus fund.
- Micro Enterprises (asset size up to P3.0 million; REITERATION: with BIR-filed FS)
- Qualified Micro Enterprises shall be approved for P200.0 thousand loan; and
- Subject to CreCom approval, the loan may be increased up to P300.0 thousand on condition that the enterprise submits a written plan duly certified by the President/CEO or Gen. Manager, on how it will re-establish itself in the market.
- For enterprises WITHOUT BIR-filed Financial Statements
- Enterprises that do not submit BIR-filed FS for 2018 and/or 2019 in their online loan application may avail of up to P100.0 thousand on the following conditions:
- No unresolved major negative credit dealings;
- Submission of Mayor’s Business Permit for 2019 and 2020 for loans amounts of P50.0 thousand up to P100.0 thousand.Submission of Barangay Business Permit for 2019 and 2020 for loan amounts of P10.0 thousand up to P50.0 thousand.
- Submission of three (3) photos and 1- to 3-minutevideo about the business per SB Corporation-prescribed content as detailed in Item no. 6 below.
- A higher amount of up to P200.0 thousand may be considered for enterprises without BIR-filed FS on the following conditions:
- The submitted pictures and videos clearly give evidence to an asset size of more than P500.0 thousand.
- The enterprise agrees to submit valid proof of sales (e.g. official receipts (Ors) issued, consummated purchase orders (POs) in 2018 and/or 2019 covering at least the 4th quarter of the year.
- What are the requirements that need to be submitted upon online application?
- For enterprises with BIR-filed FS for 2018 or 2019, loan applicants must submit by uploading in the specified fields in the Borrower Registration System (BRS) upon online application:
- (a) BIR 1701 for Sole Proprietorship or BIR 1702 for Corporations, (b) Balance Sheet, and (c) Income Statement.
- For Sole Proprietorship enterprises, a jpeg-format photo of a government-issued ID of the co-borrower if the principal borrower is 66 years old or older.
- Only if applicable, a written plan duly certified by the President/CEO on how to restart or to improve its business mode.
- Only if applicable, evidence of rehiring or retention of significant number of employees/workers at risk of permanent retrenchment without the economic stimulus fund.
- For enterprises WITHOUT BIR-filed FS, loan applicants must submit the following by uploading in the specified fields in the BRS upon online application:
- Mayor’s Business Permit for 2019 AND 2020 loans above P50.0 thousand up to P100.0 thousand.
- Barangay Business Permit/Certification for 2019 AND 2020 for loans from P10.0 thousand up to P50.0 thousand.
- Three (3) jpeg-format photos which must show the following:
- Business Owner or President with the inventory of products and raw materials
- Business Owner or President with the major business assets such as machinery, tools, equipment, etc.
- Business Owner or President with the business building/warehouse or signage in the background
- One- to three-minute video of the business owner/ President or key officers showing and explaining the following:
- Average Monthly Sales and Annual Sales prior to COVID-19 pandemic and during the pandemic
- Major business assets and its present market value (inventories, machinery, tools, equipment, etc.)
- No. of employees and their functions prior and during COVID-19 pandemic
- Loan purpose
- For Sole Proprietorship, a jpeg-format photo of a government-issued ID of the co-borrower if the principal borrower is 66 years old or above.
- Only if applicable, valid proof of sales (e.g. official receipts (Ors) issued, consummated purchase orders (POs) in 2018 and/or 2019 covering at least the 4th quarter of the year.
- What are the requirements that need to be submitted for loan release?
Applicants must be extra careful in submitting upon online application the following loan release requirements:
- Government-issued ID of the business owner (For Sole Proprietorship Enterprises) or the President/CEO (For Corporations). Please take note that only the Business Owner and the President/CEO are qualified to represent the business in applying for a CARES loan.
- In case of corporations, Secretary’s Certificate identifying name of President/CEO and on authority to borrow from SB Corportion (a pro-forma may be requested from the SB Corporation).
- Bank account of the business owner or of the corporation where the loan release will be made by SB Corporation.
Additional information on ensuring information accountability prior to loan release:
- The business owner of President/CEO shall sign on the online loan application via an electronic Signing Pad into the system. In case of sole proprietorship with principal borrower who is 66 years old or above, the co-borrower must also sign on the online application.
- Any major misrepresentation in the online loan applications shall lead to load denial.In the case of already released loan, the account shall be reported to the Credit Information Corporation given that the loan will be declared due and demandable at the onset of discovery of major misrepresentation.
- The business owner or President/CEO shall sign any additional information to be submitted such as the plan on how to restart/improve operations, and on all loan release documents.
- How much are the loan interests?
The CARES program offers interest- and collateral-FREE loans. It only charges a service fee of 4% up to 8% depending on the loan term:
4 years (applicable only for loans above P100,000)
- Is a Bank Account a required in applying for a CARES loan?
- The loan applicant must have an Electonic Money Account (EMA) in order to apply for a CARES loan.An EMA may be any bank account that is acceptable to Land Bank of the Philippines (LBP) for fund transfers through Pesonet and Instapay.This includes GCASH, but only for loans amounting to P10.0 thousand up to P50.0 thousand.
- A proof of the loan applicant’s EMA such as a photo of the ATM card or passbook where the name of the business owner (for Sole Proprietorship Enterprises) or of the Corporation (for Corporations) is visible must be submitted upon online application.
- Acceptable EMAs:
- Landbank savings account (the fourth digit of the account must be “6” or “7”) – Direct fund transfer.This is the most efficient, most secure, and fastest mode of loan release.There is no transaction fee.
- Other bank accounts through Pesonet and Instapay – There is a corresponding transaction fee.
- GCASH (must be fully-registered/activated) thru Instapay – only applicable for P10.0 thousand up to P50.0 thousand loans
- How will I know that my application has been successfully filed in the BRS?
Once the application form is completely filled up, the BRS will send to the registered e-mail address the following notice:
“Congratulations! You have successfully submitted your loan application.
This is system-generated e-mail, please do not reply to this e-mail address.”
This means that the CARES loan application has already been forwarded to the Business Information Assessment Team (BIAT) which will assess the completeness and accuracy of the submitted documentary requirements. In case of incomplete or inaccurate submission, the BIAT will send an email identifying the documents that need to be re-uploaded or submitted.
- How long will it take to process a loan application?
The turnaround time is from two (2) weeks up to 1 month, depending on the requested loan amount as stated in Item No. 5 above. Applying for a higher loan amount than the default amount entails longer processing time since the account has to go through CreCom deliberation.
- What are the possible reasons for loan denial?
- If the loan applicant has major unresolved credit dealings with financial institutions.
- If the loan applicant is not able to submit the required documentary requirements within the prescribed period.
- How to check loan application status?
- Online checking through https://bit.ly/P3CaresUpdate
- Call the Bayanihan CARES call center hotline: 8651-3333 (NCR) 1 800 10651 3333 (Nationwide), Mondays to Saturdays from 9:00 am up to 5:00 pm
- E-mail our consumer protection department at email@example.com
- Go to the nearest SB Corporation Field Office.Check the location and contact details of SB Corporation Field Offices at https://www.sbgfc.org.ph/about-us/directory-offices
- What are the possible statuses of loan applications and what the loan applicant should expect from each status?
Phase 1:Business Information Assessment / Credit Standing Assessment
- “Documents Incomplete” – Documents submitted are not yet complete.The loan applicant should receive an email from SB Corporation identifying the documents that need to be submitted.
- “Documents Denied” – The loan applicant failed to submit the required documents within the prescribed period. The loan applicant may file an appeal for reconsideration of his/her loan application through the Consumer Protection Department as stated inItem No. 19 below.
- “Still for Document Verification” – Documents submitted are still for assessment.
Phase 2: Business Verification
- “Loan Recommendation Deferred” – The business verification is on process.
- “Still for Business Verification” – The account is either for assignment to a loan officer/business verifier or still for action of the business verifier.
Phase 3: Loan Approval
- “Loan Disapproved” – The loan applicant may file an appeal for reconsideration through the Consumer Protection Department as stated in Item No. 19 below.
- “Still for Decision” – The loan officer/business verifier’s recommendation is still for review of the approving authority and/or the Credit Committee.
Phase 4: Loan Releasing
- “Released” – the loan proceeds has been released.The loan applicant should immediately get in touch with the SB Corporation Field Officer should there be any concern about the loan release.
- “Approved but Still for Release” – The loan application has been approved.The loan documents (Promissory Note, Disclosure Statement, etc.) are still being prepared.
- “Awaiting Client’s Signature” – The loan documents are ready for signing.The loan applicant should expect an advisory (through SMS/text or email) from the Field Staff about the schedule of loan documents signing.
- “Scheduled for Release” – The loan applicant has signed the loan documents and just needs to wait for the fund transfer to take place.
- How many days will it take for the loan proceeds to be credited to the LBP cash card?
The LBP cash cards ONLY APPLY to applications under CARES 1 and CARES 2. The loan applicant should expect the loan proceeds to be credited to the LBP cash card in 3 to 7 banking days. The loan applicant should get in touch with the Field Officer if it exceeds the prescribed period.
For Bayanihan CARES accounts, the only mode of release is through fund transfer to the loan applicant’s EMA as provided upon online application.
- Can business start-ups and/or individuals who are still planning to start a business avail of a CARES loan?
The CARES Program is designed and is available only for existing MSMEs which are registered with the local government unit for at least one year at the time of application.
- For applications under CARES for TRAVEL, what should the loan applicant do if the DOT accreditation number is not accepted in the BRS?
The loan applicant should get in touch with SB Corporation to ask for the specific DOT-provided accreditation number through firstname.lastname@example.org.
- What happens in case of loan default or non-payment of CARES loan?
A corresponding .5% per month of non-payment shall be charged to the borrower. SB Corporation may take legal actions depending on the amount of outstanding loan. Further, non-payment of CARES loan will have a negative effect on the borrower’s credit standing and future transactions with other financial institutions.
- In case of disapproved loan applications, can a loan applicant appeal for reconsideration?
The loan applicant whose loan application has been denied may request for reconsideration if the reason for denial is unresolved major negative credit dealings with financial institutions. This is on the condition that the borrower is able to secure and will be able to submit a proof of full settlement of account or a valid settlement agreement with concerned financial institution/s (e.g. Certificate of Full Payment or Settlement/Loan Restructuring Agreement).
Further, loan applicants whose loan applications have been denied for reasons other than unresolved major credit dealings may still file an appeal for humanitarian consideration.
Appeals are subject to assessment of the SB Corporation Consumer Protection Department if it merits to be endorsed for approval by the Financing Sector.