Small and Medium Enterprise Loans

Objectives: To provide loan facilities to fund any business activity or enterprises engaged in industry/agri-business and/or services, where sole proprietorship or cooperatives –

A. Whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value under the following:

Micro: Up to P 3 Million
Small: P 3,000,001 – P 15,000,000
Medium: P 15,000,001 – P 100,000,000

B. Duly registered with the appropriate agencies as presently provided by the law

C. A business activity within the major sectors of the economy, namely: industry, services, including the practice of one’s profession, the operation of tourism related establishments and agri-business, which for this purpose refers to any business activity involving the manufacturing, processing and/or production of agricultural product, excluding farm-level agricultural/crop production.

Target Market:

Business Owners (Jewelry store, Construction, Hardware, Sand & Gravel supplier, Hollow block Maker, Eatery, Restaurant, General Merchandise, Internet Café, Print Shop, Photocopying business, Candle Making, Automobile Shop, Motorcycle Shop, Ironworks and Fabrication, Trading, Aircon and Refrigeration Services, Bakery, Cakes & Pastries, Barber Shop/Beauty Salon, Tailoring/Dressmaking, Resort, V-hire Operators, Water Refilling Station, Laundry Shop).
Market Vendors
Fruit Vendor/Street Vendors
Pedicab Operators
Motorcycle-for-Hire Operators
Cooperatives
Professionals (doctors, dentists, ophthalmologists, lawyers, engineers, etc.)

Features of the Loan Product:

Interest Rate: 10% – 19% p.a.
Service Charge: 5%
Processing Fee: 0.5%
Term 180 – 1,800, depending on loan purpose. If purpose is for working capital, term of the loan shall be up to a maximum of one (1) year only. If loan purpose is for purchase of machinery and equipment, maximum term is five (5) years with periodic repayment depending on the cash flow conditions of the borrower. The loan shall be secured with a Real Estate Mortgage or Chattel Mortgage.

Business existence of at least three (3) years is required. For start-up businesses, paying capacity shall be determined from the existing cash flow of the borrower and not from the business about to be put up.

A. Acquisition of Brand-New Vehicles for Use in Business

Loanable Amount: 80% of the acquisition cost
Equity required: 20% of the acquisition cost
Service Charge: 4%
Processing Fee: 1%
Maximum Term: 5 years
Mode of Payment: Based on cash flows of the borrower

The loan shall require borrower’s equity of 20%. If the borrower cannot make the cash equity of 20%, the borrower must mortgage a residential/commercial property with loan value equal to or more than the 20% equity. Loan proceeds will be paid directly to the auto dealer. The Certificate of Registration of the vehicle shall be in the name of the borrower but encumbered with the bank. If a real estate property is used as collateral, the title of the property must be annotated for the encumbrance. Mode of payment shall depend on the cash flow condition of the business of the borrower. The encumbered vehicle must be covered with a comprehensive insurance, duly endorsed to the Bank. The cost of the comprehensive insurance shall be included in the amount to be financed.

Loan tie-up with car dealers:

Features of the Loan Product:

Interest rate: 10% – 19% p.a.
Service charge: 5%
Processing fee: 1%
Cash equity: minimum of 10% or avail of dealer’s promotional down payment
Dealer’s Incentive – 5% of the financed amount shall be disbursed to the dealer upon release of the loan
Agent’s Incentive – 1% of the financed amount shall be disbursed to the sales agent of the dealer

The Certificate of Registration of the vehicle shall be in the name of the borrower but encumbered with the bank. If a real estate property is used as collateral, the title of the property must be annotated for the encumbrance. Mode of payment shall depend on the cash flow condition of the borrower. The encumbered vehicle must be covered with a comprehensive insurance, duly endorsed to the Bank.

B. Acquisition of 2^nd Hand Vehicle (SUV, car, pick-up):

Features of the Loan Product:

Interest rate: 10% – 19% depending on BRR
Service charge: 4.5%
Processing fee: 1%
Term: Maximum of three (3) years
Cash equity: minimum of 20% or equivalent loan value of real estate property
Mode of Payment: Based on cash flows of the client
Insurance: Third Party Liability

The Certificate of Registration of the vehicle may not be encumbered but shall be kept by the Bank provided, that the term of the loan is six (6) months and below. The borrower shall initially provide for the payment of the registration of the encumbrance and shall sign documents supporting the loan such as the Chattel Mortgage, Deed of Sale, stencils and other related documents. The amount intended for the registration shall be returned to the borrower if the loan is already fully paid.

C. Acquisition of Motorcycle

Features of the Loan Product:

Interest Rate: 10% – 19% p.a.
Service Charge: 5%
Processing Fee: 0.5%
Term: Three (3) years
Mode of Payment: Monthly
The Motorcycle Loan may be availed for the following:
Purchase of brand new tricycle (10% equity required);
Finance a recently-purchased tricycle – purchased within one (1) year from the date of loan application (10% equity required); and
Purchase of brand new motorcycle (If the cost of the motorcycle is P 50,000 and below, equity of 5% is required; If the cost of the motorcycle is more than P 50,000, equity of 10% is required)

The tricycle to be purchased must have a franchise. Loan proceeds will be paid directly to the motorcycle dealer. The Certificate of Registration of the tricycle/motorcycle shall be in the name of the borrower but encumbered with the Bank. Mode of payment shall depend on the cash flow condition of the borrower.

D. Acquisition of Equipment for Use in Business (except heavy equipment)

Features of the Loan Product:

Interest rate: 10% – 19% depending on BRR
Service charge: 5%
Processing fee: 0.5%
Term: Maximum of five (5) years
Mode of Payment: Depends on cash flow of the client
Insurance: Fire insurance based on acquisition cost (to be included in the cost to be financed)

Other Requirements: Registration with concerned regulatory body whenever applicable

E. Additional Capital for Inventory

Features of the Loan Product:

Interest rate: 10% – 19% depending on BRR
Service charge: 5%
Processing fee: 0.5%
Term: Maximum of three (3) years
Insurance: Fire insurance based on market value of inventory

Retailing business

Term: Six (6) months
Mode of Payment: Weekly
Collateral: Chattel or Real Estate Mortgage for loans exceeding P50,000

Construction

Loanable Amount: 80% of Project Need
Term: Based on the term of the project
Mode of Payment: based on progress billings to client
Collateral: Chattel or Real Estate for loans exceeding P 50,000

Maximum amount for Microenterprise loans is P 150,000.00

Products and Services

“As part of brief interaction, have noticed a very high professionalism on GBNO’s part! They are very prompt and have managed to keep their word as part of process”