The City Council, during last Monday’s regular session, approved the guidelines governing the implementation of Baguio’s Revitalization Actions for a Vibrant Economy – Economic Stimulus Package (BRAVE-ESP), a financing facility created by the local government for micro and small business for the purpose of mitigating the impact of the Coronavirus Disease 2019 (COVID-19) global pandemic.
Earlier, the Council approved an ordinance that earmarked some P100 million for the special financing program sourced from the P150 million appropriations for COVID-19 operations.
Under the approved guidelines, all types of projects of a qualified micro and small enterprise affected by the community quarantine, both enhanced and general declarations, shall be eligible for financing, except those undertaken for unlawful purposes.
Micro enterprises are businesses having gross receipts of up to P3 million annually while small enterprises are business having gross receipts from P3,000,001 up to P15 million.
The purposes of the loan will be for working capital replacement to ensure liquidity of firms, particularly the payment of non-deferrable or fixed operating cost incurred, such as payroll, rent, utilities and fixed asset loans; replacement of inventories damaged or consumed during the community quarantine period and financing of capital expenditures such as equipment.
The eligibility requirements for qualified borrowers include the applicant must be a 100 percent Filipino-owned micro or small enterprises; legitimately operating for at least 1 year immediately prior to March 16, 2020 and affected by the imposition of the community quarantine; gross receipts of up to P15 million; business located in Baguio City; micro and small enterprises that have not availed of similar packages from other government institutions and favorable credit checking result.
Further, a co-maker or co-borrower shall be required if the borrower is 60 years old and above while an immediate family member or relative with source of income shall be required.
The loanable amount for the qualified applicants ranges from a minimum of P10,000 up to a maximum of P100,000. For micro enterprises, maximum loanable amount is P50,000 and for small enterprises, maximum loanable amount is P100,000.
He interests rate for the loan is 0 percent while a service fee of 6 percent to 8 percent where loans payable for 12 months shall have a 6 percent charge but loans payable for more than 12 months shall have an 8 percent service charge.
The guidelines stated that the service shall be deducted from the borrower’s loan and that the same will be remitted to the Small Business Corporation (SBC) as the city’s partner in the sustainable implementation of the project.
On the other hand, a monthly penalty rate of 0.5 percent on the outstanding balance shall apply to borrowers who fail to pay their monthly amortization where the rate collected will accrue to the local government.
The local government does not require the borrowers to have a collateral to be able to avail of the loan under the stimulus package. By Dexter A. See
