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4 Types of BDO Business Loans

Sometimes to get your life starting, we need a little boost. Solely ideas and wants are at times not enough to help you make further steps in achieving some of your plans and dreams. And money problems are the common reason why some dreams stay as dreams. But thanks to the different kinds of loans offered by BDO, some dreams don’t seem that out of reach anymore. They find ways in how they can help you.

BDO offers 4 types of loans.

  • Small Business Loan
  • Project Finance Loan
  • Term Loan
  • Working Capital Loan

We will discuss each one by one, to see if maybe one can be of use to you.

Small Business Loans

BDO created this type of loan in order to help people have an immediate response to prospects and also in terms of handling challenges in their business. BDO would support by providing loan facilities that can be of use to you by managing your cash flow more efficiently or acquiring property and equipment for higher productivity.

In here you can borrow an amount of up to Php20 Million. This would depend on the appraised value of your collateral. BDO gives the freedom to their customer to pay the loan from a year up to 10 years by choosing the payment option that matches the customer’s cash flow.

And it is easy to avail. How? Simply use your real estate property (residential, mixed-use or commercial) as collateral.

Who is qualified for the Small Business Loan?

The candidate must be at least 21 years old but not exceeding 65 years old by the end of the loan term. He/she must have a stable source of income from business and/or employment.

○ If Employed, at least 2 years of continuous employment (may be waived if rank is at least Manager Level)

○ If Professional (doctor, lawyer, etc.), at least 3 years in practice of profession

The business is in profitable operation for at least 2 consecutive years, with a minimum annual gross sale of P1 Million.  And the business should be within a BDO serviceable area.

What are the requirements when applying?

For basic documents, all candidates would need to have:

  • The filled-out and signed application form (link at the bottom of the article)
  • A clear copy of 1 valid ID matching application details, e.g. Passport, Driver’s License, SSS
  • If applicable, Marriage Contract

As for income documents, see below which applies to you:

Employed individual

For those who are locally employed:

  • Latest Income Tax Return or BIR 2316 or latest pay slip
  • Certificate of Employment (COE) with Salary
For those who are employed abroad:
  • Proof of remittance for the last 3 months
  • For seafarers, your latest crew contract
  • Certificate of Employment with Salary of Employment Contract that is consularized if there is no proof of income that has been submitted
Self-Employed/Sole Proprietor
  • Photocopy of Audited Financial Statements for the last 2 years along with a copy of latest ITR.
  • Bank Statements or Photocopy of Passbook for the last 3 months
  • Certificate of Business Registration with the DTI
  • Business Background or Company Profile
  • Proof of OTHER income, if any (In the case of having extra income from rental of property/ies: required documents are lease contract and photocopy of TCT/CCT
Partnership
  • Photocopy of Audited Financial statements for the last 2 years along with the latest ITR
  • Bank statements or photocopy of Passbook for the last 3 months
  • Articles of Partnership AND Certificate of Registration that was issued by the SEC
Corporation
  • Photocopy of Audited Financial statements for the last 2 years along with the latest ITR
  • Bank statements or photocopy of Passbook for the last 3 months
  • Any of these following: Certificate of Registration that was issued by the SEC; – Latest amended Articles of Incorporation and By-Laws; List of Elected Officers; Board Resolution; Secretary’s Certificate

As for Collateral Documents, they are as follows:

  • Photocopy of TCT/CCT
  • Photocopy of Tax Declaration
  • Appraisal Fee

For Construction Loan: Building/ Floor Plan of proposed improvement; Bill of Materials; Specifications of proposed finishes

For Refinancing / Loan Take out: Statement of Account from current bank and official receipts for the last three (3) months

Where to submit all these requirements?

Candidates can submit these requirements through any of the BDO Small Business Loan Sales sites.

For Metro Manila

you may contact (02) 667 – 1624 / (02) 631-8000

For North Luzon

◘  Laoag – (077) 670-0451

◘  Vigan – (077) 722-1572

◘  Baguio – (074) 442-1248

◘  Dagupan – (075) 653-3263

◘  Cabanatuan – (044) 463-9977

◘  Isabela – (078) 305-3134

◘  Tarlac – (077) 670-0451

◘  Pampanga – (045) 458-1159 / (045) 961-8005

 

For South Luzon

◘  Santa Rosa – (02) 702-6000 local 58114

◘  San Pablo – (049) 503-2932

◘  Batangas – (043) 723-7322

◘  Naga – (054) 472-6549

For Visayas

◘  Cebu – (032) 256-9427 / (032) 256-9406

◘  Bacolod – (034) 435-8015

◘  Iloilo – (033) 3365054 / (033) 336-8165

For Mindanao

◘  Davao -(082) 221-9457

◘  Cagayan de Oro (088) 856-6839 / (088) 856-2291

◘  General Santos – (083) 552-4198

For BDO branches nationwide. You may refer to this site   https://www.bdo.com.ph/branches-atms-locator  to find a BDO branch near you.

What are the required fees?

An appraisal fee (per title) is required upon submission of the required loan documents. If the collateral is situated within Metro Manila, Php 3,500 would be the fee. If the collateral is situated outside Metro Manila, Php 4,500 would be the fee. The fee can be paid at any BDO branch

What are the other loan-related fees?

If the loan is approved, the following fees will be required to be paid before the proceeds of the loan will be released.

Handling Fee                                      –              Php 5,000

Notarization Fee                              –              Php 500

Collateral Registration Fee           –              Variable, based on the approved loan amount and standard                Registration of Deeds (RD) fees

Documentary Stamp Tax              –              Php 1.00 for every 200 of the approved loan amount

Commitment Fee                            –              Variable, based on percentage of approved credit line

Mortgage Redemption Insurance –          Php 4.75 for every Pho 1,000 of approved loan amount (this is assuming the standard rate for borrowers up to 49 years old); Php 6.50 for every Php 1,000 of the approved loan amount (this is assuming the standard rate for borrowers bettwen 50 to 64years old)

Fire Insurance Premium                –              Variable, based on the appraised value of the improvement on the property submitted as collateral

 

What is the mode of payment?

The Automatic Debit Arrangement (ADA) will be the mode of payment, wherein the monthly amortization for Term Loan or minimum amount due for SME Ready Check will be deducted from your BDO account.

What are their Interest Rates?

Fixing  Period Interest Rate
1 year 7 %
2 years 7%
3 years 7%
4 years 8.50%
5 years 8.50%

REMINDER! This is subject to change without prior notice

Project Finance Loan

It is the funding of projects which rely on the project’s available fund as repayment.

Who are qualified for the Project Finance Loan?

People who are qualified for the project finance loan are those that involve Greenfield projects and significant facility or production expansions. BDO has usually funded projects in the past  that  involve independent power generation facilities, natural resources projects such as mining, oil and gas, public infrastructure including toll-road systems, airports, shipping ports, railway systems, are just among others.

Project Criteria of BDO:

  • The project should have long-term contracts from certified entities for the acquisition of the project’s output and the acquisition of the project’s major project inputs such as fuel, raw materials, and operations and maintenance.
  • The project should have a suitable distribution of risk to the parties best fitted to handle those risks.  Sensitivity research should result to adequate debt service coverage ratio to guarantee regular debt servicing for the term of the debt.
  • Total project cost should be proportionate to projects of similar type and size for a particular market.
  • Pricing and costs should reflect market based pricing.

What are the general requirements of BDO?

  • There should be detailed information memorandum that has been prepared by a qualified party.  Information that should be included is the project description, location, legal status, ownership, background and status of key elements (i.e. agreements, licenses, local partner participation) of the project structure.
  • All the necessary contracts related to the project
  • Breakdown of estimated project costs through commissioning, including the interest during construction and working capital requirements, by major cost category and country of origin and these include any “soft costs”. Examples are development costs, development fees, owner’s contingencies, etc.  And also projected analysis for interest during construction and the method of calculation
  • A summary of the expect project financing plan and also security package which should also include the proposed source, amount, currency and terms of the debt and equity investments; the sources of finance in the event of project cost overruns; and description of escrow accounts.
  • If applicable, information on the terms, security requirements, and status of financing obligations of other lenders to the project, should as well be provided.  All other sources approached for financing must be disclosed.
  • Assessed annual financial statements, including a sensitivity assessment for not only the anticipated scenarios, but as well in cases with both pessimistic and optimistic views.
  • Premise for the financial projections
  • Market information to include 10 years of historical price and volume data; present and predicted capacity of industry; product demand forecast with assumptions; description of competition and projected market share compared to the shares of the competition; identity and location of customers; and marketing and distribution strategy.
  • A description of the principal risks and benefits of the project to the sponsors, lenders, and host government.
  • A description of the different types of insurance coverage to be purchased for both the pre-completion and post-completion phases of the project.
  • Information on infrastructure required for the project to operate, specifically information pertaining to the timing, status and developmental plans.

Term Loan

Term loans are commonly used for cases such as Construction of buildings, factories and plants, plant expansion and modernization, leasehold improvements, and purchase equipment.

BDO’s term loan may be a medium term that is to be paid within 1-3 years. If long term, it is to be paid over 3 – 5 years.

What are the required documents?

  • SEC Papers, Articles of Incorporation, By-Laws and latest General Information Sheet
  • A list of top customers and suppliers with their contact information
  • Bank Statements for the last 6 months
  • Collateral documents (If real properties, a copy of TCT, Tax Declaration, lot plan and vicinity map. If machinery,  a copy of sales contract, purchase order and brochure)

Working Capital Loan

BDO’s working capital loan gives various choices to candidates on what type of loan they would deem necessary.

Short-term loan – This is if only a 1- time loan is needed.  It can be paid in 1 year or less.

Credit line – This is for the recurring need for a loan for a series of funds requirement to finance inventory or receivables or other working capital requirement based on the business cycle. The credit line will be available to you for drawing within a year. This loan may be re-availed.

Export finance – This is for exporters for pre- and post-shipment financing requirements.

Post-Dated Check Discounting – Submit the PDCs of your customers to BDO together with Delivery Receipt, and BDO will grant you a loan amounting to the equivalent value of the PDCs. You will only be charged interest up to the date of the Post Dated Check.

Inventory Financing with Trust Receipt (IFTR) – This is for payment to your suppliers. Submit to BDO the invoices from your suppliers together with the Delivery Receipt, and BDO will pay them directly. Purchases qualified for this loan are those for inventory build-up.

Letters of Credit with Trust Receipt (LCTR) – This is for both domestic and international trade transactions usually for the purchase of raw materials and supplies.

What are the required documents?

  • SEC Papers, Articles of Incorporation, By-Laws and latest General Information Sheet
  • List of top customers and suppliers with contact information
  • Bank Statements for the last 6 months
  • Collateral documents (If real properties, a copy of TCT, Tax Declaration, lot plan and vicinity map. If machinery, a copy of sales contract, purchase order and brochure)
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