The Small Business Corporation, the Department of Trade and Industry's lending arm, will provide a loan facility for franchisees following the sealing of a Memorandum of Agreement (MoA) between SB Corp. and the Philippine Franchisers Association (PFA) on Tuesday. The agreement aims to strengthen the partnership between the PFA and DTI in the area of MSME development.

The MoA was signed by Trade Acting Secretary Christina Roque, SB Corp. President Robert “Bobby” Bastillo, and PFA Chairperson Sam Christopher Lim, at the DTI office in Makati City on Tuesday.

According to Roque, the partnership encourages MSMEs to franchise their brands or enter the franchise business.

“Frequently, now that we are global already, sometimes the business is already sunset industry. The best way to recover or to be able to bounce back and grow is to get into franchising. If they have money and that is not enough, then they can apply for a loan using the franchise model. Because with the franchise, the chances of success are higher,” Roque said.

She added that overseas Filipino workers are also being encouraged to open franchise businesses to grow, once they return to the Philippines.

“We at the DTI want to open different business opportunities to Filipinos and the businesses that suit them. Franchise is a very strong option to enable MSMEs to uplift or better their lives,” she added.

The PFA, as a signatory to the MoA, will prepare a list of prospective franchisees to be sent to the DTI, who will then be scrutinized by the SB Corp.

“We have about 200 members that cover about 500 to 600 brands,” Lim said.

The PFA is a voluntary self-regulating body for franchising in the country, and its members are bound by the Fair Franchising Standards (FFS), the association’s code of ethics, which exhorts members to practice transparency and fairness in the sale of their franchises.

Aside from providing loans, the DTI, through the SB Corp and the PFA, will have a joint promotion and capability-building for franchisers, while the DTI will also send prospective franchisors to the training programs.

Meanwhile, SB Corp’s President Bastillo said an approved product line or program has already been prepared by the SB Corp. Board in anticipation of the MoA signing.

“We already [have] all systems go on this. We are just awaiting the top 200 from the PFA. We can offer P500 million to P1 Billion funding for the whole facility. We are ready for it,” said Bastillo, adding that the loan facility is open to both existing and prospective franchisees, or first-timers who can be part of the program.

Bastillo explained that SB Corp. can provide loans to franchisees for the program from P200,000 to P1 million, “but in general, the loan facility of the SB Corp. starts with the minimum of P30,000 up to P3 million for first-time borrowers, collateral-free for repeat borrowers, meaning, continuously or those we call suki.”

“These “suki” can increase their loan up to P5 million, collateral-free,” he stated.