WITH the increasing presence of tech startups in Cebu, an official of a government-owned financial institution said startups, like other small and medium enterprises (SMEs) involved in traditional businesses, can avail themselves of financing from P200,000 to P5 million from the Small Business Corp., the financing arm of the Department of Trade and Industry (DTI).
SB Corp. Visayas Group head Francisco Buenavides said startups who have been “successfully operating” for two years can avail themselves of loans under the agency’s retail lending program.
“Under our policy, we are not closed to (tech) startup businesses. Siguro lang, it would take an extra evaluation, extra process in evaluating the account,” Buenavides said. He said granting loans to this sector is new for them; hence the longer process than traditional businesses.
He said bulk of borrowers in SB Corp. is in trading and general merchandise. Enterprises that are in the services sector like contractors also avail themselves of the agency’s retail lending program.
Those who cannot get loans from SB Corp. are businesses purely involved in the trading of imported goods, real estate developers and those involved in vice-generating activities.
SB Corp’s loan releases in 2013 was at P3.3 billion. By the end of 2013, SB Corp.’s total loan releases to micro and SMEs (mSMEs) already reached P40 billion, starting from 2001.
Buenavides said those who would like to avail themselves of loans in SB Corp. should submit registration papers and financial documents. More detailed guidelines can be found in their office in the eighth floor of Keppel Building in Cebu Business Park.
Aside from retail lending, SB Corp. also offers credit guarantees where there are “guarantee programs designed to augment the collateral cover of SMEs to encourage banks to lend to small and medium sized enterprises with collateral deficiencies.”
The official said he could not recall any tech startup that availed itself of a loan from SB Corp. so far. He acknowledged that he has observed a growing number of them in Cebu.
Interest rates for SB Corp’s retail lending is at 12.5 percent per annum and is payable on average of three years.
In the Philippines, startup funding usually come from the private sector. Some that are involved in incubation and funding include Kickstart and Ideaspace. Others, meanwhile, tap foreign investors to get more funding.
The Department of Science and Technology, on the other hand, poured in funds for incubating facilities in Cebu and Manila. For the Cebu Business Incubator for Information Technology or CebuinIT in the University of the Philippines Cebu, DOST invested P8.5 million.
By 2016, the DOST Information and Communications Technology Office is envisioning 50 startups in the Philippines with average annual revenues of at least P10 million each, according to DOST ICTO program manager Emmy Delfin in previous interview through Seed.ph, the agency-funded workshop to promote ICT-based startups done across the country.
Buenavides said those who are interested to avail of SB Corp’s financial programs can attend a financing forum held every second Friday of the month in the office of the Cebu Chamber of Commerce and Industry in 13th Avenue, North Reclamation Area in Cebu City.
Published in the Sun.Star Cebu newspaper on October 23, 2014.
