What is SSS?
The Social Security System (SSS) is a government insurance company that strives to protect Filipinos against different contingencies such as sickness, maternity, unemployment, etc. The benefits and programs offered are solely available to its members and beneficiaries. To guarantee that every Filipino will be able to access these programs and services, the Philippine Labor Code requires both employees and employers to contribute to the SSS through salary deductions.
In addition to providing replacement income in the event of unforeseen circumstances, SSS also allows its qualified members to apply for salary, housing, educational, and business loans – one of which is the SSS Business Loan Development Facility.
Business Loan Development Facility
The SSS Business Loan Development Facility was created to help businesses enhance productivity and potential revenue through expansion, diversification, and development projects, while also helping the country’s economy by increasing economic activity and producing additional career opportunities.
Qualified borrowers may use the loan proceeds for site development, improvement of existing facilities, buildings construction and other civil works, the acquisition, repair or upgrade of machinery and equipment, acquisition of existing facilities, and acquisition of up to 50% of the cost of land, or working capital.
PFIs and the SSS will decide whether collateral is acceptable to fully secure the business loan.
Business Loan Features
Two important conditions in determining the maximum loan amount are that the debt-to-equity ratio of the company should not exceed 3:1 and that the total loan amount must not exceed the Investment Reserve Fund (IRF) of SSS by 1%.
Loan Amount:
The lowest of the following:
- Applied loan amount;
- Total Project Cost;
- Value of the collateral used to secure the loan; or
- Not more than Php5 Million per borrower
Interest Rate: Prevailing interest rate based on SSS pass-on rate to PFI plus PFI’s spread that is reviewed monthly. It can be fixed or variable.
Loan Term: up to 15 years with a 3-year grace period. For extractive industries and forest development projects, the maximum term can be up to 25 years.
Who is Eligible to Apply for Business Loan in SSS
Aside from being an active SSS member-employer with a good credit standing, there are other factors applicants should know to verify if they are entitled to receive the benefits of the SSS Business Loan Development Facility by reviewing the eligibility criteria listed below:
- All new or existing private industries and companies that also include registered Barangay Micro Business Enterprises (BMBEs), provided they are at least 60% Filipino-owned Single Proprietorship, Partnership, or Corporation.
- The activities of the business must be allowed or registered and include the following:
- Agriculture Business
- Food Processing
- Manufacturing
- Commercial Production
- Service-Oriented Enterprises
- Tourism Related Projects
- Real Estate Development Projects
- Sustainable Energy Projects
- Extractive Industries
- Forest Development Projects
- Trading Business
- Leasing/Lending Business
- For existing businesses, an established track record of profitability is a must. An average income for the previous two (2) or three (3) years should still be acceptable if the company has suffered a loss in the other periods. If the business has only been in operations for the last 5 years, the 3-year profitability requirement can be waived
How to Apply for Business Loan in SSS
Following loan eligibility confirmation, interested borrowers may apply and submit the loan application to one of the SSS accredited Participating Financial Institutions (PFIs), who would then grant the requested funds to qualified borrowers. They can contact the Business and Development Loans Department at 8920-6401 loc 5115, or email [email protected] should they wish to get a list of certified PFIs.
The list of requirements will also be provided upon inquiry. For a more convenient process, borrowers can first contact SSS to determine the documents required and ensure completeness of information before visiting any of their branches to save time and money.
Conclusion
The SSS Business Loan Development Facility is an excellent opportunity for business owners to pursue their dream projects and strengthen their business operations in hopes of increasing their revenue. This is especially timely today when the pandemic has caused severe economic challenges that affected many businesses in the country and have caused many people to lose their jobs.
Pig Daddy
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