Style Living Self Celebrity Geeky News and Views
In the Paper Shop Hello! Create with us

Calling all tourism small business owners: You may now avail of loans from DOT

By PhilSTAR L!fe Published Oct 29, 2020 12:45 am

The COVID-19 pandemic has undoubtedly affected many industries including micro, small, and medium enterprises (MSMEs) all over the world. In the Philippines, 35% of Philippine MSMEs reduced their workforce due to the pandemic and 31% of small and medium-sized businesses "have shut down in the last three months", according to Facebook’s survey.

Department of Finance Undersecretary Karl Kendrick Chua also reported that "436,300 small businesses were forced to stop operations while some 1 million are only able to operate with skeleton forces after the national government placed Metro Manila and, later, the rest of Luzon, under the ECQ to stop the further spread of COVID-19."

Though the guidelines are more lenient now compared to when part of the country was placed in enhanced community quarantine (ECQ), many businesses are still trying to stay afloat. 

That being said, Department of Tourism (DOT) Secretary Bernadette Romulo-Puyat is urging tourism MSMEs to avail of the CARES for Tourism Rehabilitation and Vitalization of Enterprises and Livelihood (CARES for TRAVEL) Program "to help them sustain their businesses and keep their workers amid the ongoing pandemic," DOT said.

"The CARES for TRAVEL program primarily seeks to assist tourism MSMEs. The support we give them now will come a long way in ensuring their survival in the coming days as we embark on slowly resuming tourism. The DOT is thrilled to share the news that enterprises may submit their loan applications online, while we are awaiting the download of funds to Small Business Corp (SB Corp)," Puyat said.

Through the DOT and SB Corp's CARES for TRAVEL program, tourism MSMEs will have access to zero interest, no-collateral loans with a loan term period of up to four (4) years, including a corresponding grace period of up to one year. The borrower MSMEs will only need to pay a one-time service fee to the SB Corp, the amount of which will depend on the loan term period: 4% for one year; 6% for two years; 7.5% for three years; and 8% for four years.

To ensure the business' eligibility, SB Corp will evaluate and process all loan applications of DOT-accredited MSMEs and local government (LGU)-accredited small-scale tourism-oriented enterprises. They are also the ones who will determine the loanable amount and terms in accordance with the CARES for TRAVEL program guidelines.

If your business has financial statements (FS) in 2018 or 2019 filed with the Bureau of Internal Revenue (BIR) and have no unresolved negative credit dealings, then you are automatically eligible to apply for a loan under the program.

The initial loan amount to be granted to MSME applicants will be based on the submitted BIR-filed FS: not more than P1 million for medium enterprises; not more than P500,000 for small enterprises; and not more than P200,000 for microenterprises. Applications for a higher loan amount may be approved by SB Corp, provided that enterprises submit their written plan on how to restart or improve their business models.

Meanwhile, SB Corp shall require additional requirements for MSMEs without BIR-filed FS, which includes 2019 Mayor's Business Permit for loan requests exceeding P50,000, and 2019 Barangay Business Permit for loans less than P50,000. Likewise, enterprises must submit pictures and videos of inventories, equipment, and assets to SB Corp and have no major unresolved negative credit dealings.

Last Oct. 12, Secretary Puyat and Department of Trade and Industry (DTI) Secretary Ramon Lopez, signed a Memorandum of Agreement (MOA) that seeks to disburse the P6 billion budget allocated to SB Corp's CARES program under the Bayanihan to Recover As One Act (Bayanihan 2), directing the agency to expand its loan programs, including that for tourism and "to administer loans for DOT but subject to guidelines from the DOT.

"It was through our consultations with our stakeholders that we were able to pinpoint working capital loans as one—if not the most pressing need of tourism enterprises. Realizing the important role that MSMEs hold in the recovery of the tourism industry, the DOT shall see to it that the allocation for the CARES for TRAVEL program is dispersed fairly to qualified enterprises who will apply," Puyat added.

Tourism enterprises may access the SB Corp's CARES Bayanihan 2 Borrower Registration System here: https://brs.sbgfc.org.ph.

Banner image from Unsplash