The city government on Thursday invited start-up businesses and existing micro, small, and medium enterprises here to avail of its zero-interest soft loan program where they can borrow a maximum of PHP200,000.
City information officer Aileen Refuerzo in a telephone interview on Wednesday said the loans are under the Baguio Revitalization Actions for a Vibrant Economy–Economic Stimulus Package (BRAVE-ESP) program which was started back in 2020.
She said a maximum of PHP200,000 can be availed by the existing registered businesses while start-up businesses can avail of a maximum of PHP50,000.
She said the loan has zero interest and no collateral but has a 6-percent service charge, which will be based on the approved amount and automatically deducted from the principal.
“We invite interested MSMEs in the city to avail of the program to help them cope with their financial losses,” the official said.
The loan repayment term shall be for a minimum of six months to a maximum of 30 months with a grace period of six months, subject to regular monthly amortizations.
A monthly penalty rate of 0.5 percent on the unpaid amortization due shall apply to borrowers who fail to pay their monthly amortization.
The BRAVE-ESP was conceptualized by the city government using city funds to help ailing businesses and mitigate the impact of the coronavirus disease 2019 (Covid-19) pandemic on business operations. The Department of Trade and Industry’s (DTI) subsidiary Small Business Corporation (SBC) implements the program for the city government.
The loan should be used only either for working capital replacement; payment of non-deferrable and/or fixed operating costs incurred such as payroll, rent, utilities, and fixed-asset loans; replacement of inventories; and financing of capital expenditures such as equipment.
Refuerzo said the city’s pump-priming loan program is available only to MSMEs located in the city and is 100 percent Filipino-owned.
“Enterprises who have availed of similar packages from other government institutions are also eligible and will be assessed based on their capacity to pay,” she said.
The MSMEs that were previously approved may again avail of the loan provided that the amount of their previously approved loan plus their proposed loan amount shall not exceed PHP200,000 or the amount as determined by SBC.
In 2020, the city government allotted an initial amount of PHP100 million for the program which it later lowered due to few takers.
Refuerzo said the city government decided to continue with the program because there are still many businesses that have not recovered yet or closed businesses planning to open new lines of business but are hard up on capital.
“The city’s program will not just help the residents, but the city government also because if businesses will be well, income will redound to the city and there is a possibility of job creation by the businesses,” she said.
“It is a win-win situation for everyone and the city’s way of helping its people,” the official said. (PNA)
