COVID-19 Business Continuity: Memos that support SME Sustainability
Good news came late last week to businesses in Luzon, in terms of making a recovery for those supplying and distributing ‘non-essential goods.’
Transportation of goods, regardless if they were classified under the allowed cargo — food, medicine, and essentials — or not were approved by Department of Trade and Industry (DTI), Secretary Ramon Lopez. The memo that ensures movement of all types of cargo to go unhampered has given businesses a silver lining amid these trying times brought upon by the COVID-19 pandemic.
For businesses directly affected by the DTI’s memorandum as well as businesses that are highly leveraged at the moment, here’s a roundup of important memos that could strengthen your business continuity during these trying times.
Business Continuity for SMEs
Since the Enhanced Community Quarantine (ECQ) policy came into effect, the state of our economy has become very alarming. As the ECQ had only initially allowed those in the food, medicines and “essentials” industries to operate in Metro Manila, we worried even more for the Micro, Small and Medium Enterprises (MSMEs), who are the lifeblood of our country.
Nonetheless, as the Philippine Association of Meat Processors Inc. warned about the possibility of a severe shortage of meat products due to logistical bottlenecks in checkpoints that caused their facilities’ inability to receive needed raw and packaging materials, the DTI was quick to issue a Memorandum Circular (MC).
The MC No. 20-08 dated March 20, 2020 covers all enterprises that engage in the manufacture of food and essential goods such as medicines, soap, personal protective equipment, etc. It likewise includes the distribution and logistics to support manufacturing activities, including cargo handling, warehousing, trucking, and port operations.
Retail establishments such as supermarkets, groceries, hypermarkets, convenience stores, and pharmacies and drug stores, and the Export and Business Process Outsourcing (BPO) companies are likewise included in the said issuance.
Apart from the unhampered movement of all cargoes, the MC lists that cargo would still be subject to random inspection, but movement shall not be delayed, upon presentation of the cargo manifest of delivery receipt that indicates the destination, nature and quantity of the loaded goods.
More Cushion for Businesses and the Local Economy
The business community pulled together to cushion the economy from a bloodbath by freezing rent given by SM, Robinsons, and the Ayala Malls to their tenants; payments to utilities were deferred; as well as the filing and payment of VAT and percentage taxes from March 20 to April 20, 2020 as stated in the BIR Revenue Memorandum Circular. Additionally, the Securities and Exchange Commission (SEC), through their Corporate Governance and Finance Department issued a notice just this week to call for financing firms to support small businesses amid the COVID-19 pandemic.
The notice reads that the SEC “strongly encourages all Financing Companies (FC) and Lending Companies (LC) to adopt measures that will help ease their borrowers’ financial burden. FCs and LCs may implement measures such as, but not limited to the following: a. lowering of interest rates; b. waiver or reduction of penalties, charges and other fees; c. loan term extension; d. suspension of collection; e. payment holiday; and f. debt consolidation. FCs and LCs may also develop and implement their own programs or schemes that will provide financial relief to their borrowers.”
Business Financing in the Time of COVID-19
While some companies remain highly leveraged at the time, it is also highly discouraged for such companies to take on another business financing or loan at the moment. Try to get in touch with business groups like Bounce Back PH and continue to watch out for government updates on financial provisions for businesses from legitimate sources on a daily basis to prevent your business from suffering more business disruption or worse, demise.
For businesses that find themselves in a race for survival, worrying about how to finance more orders or working capital expenses such as your business’ short-term expenses — purchase of inventory, employees’ salaries, etc. — now is the time to try online financing.
Online financing through an online lending company is the fastest way you can get a loan during the COVID-19 pandemic. If you’re not familiar with business financing through Fintech, you’ll be amazed by the convenience provided by taking out an online loan. First, the entire application process can be done online, at the convenience of your own home or wherever you are during this time. The application process includes: 1. filling out the application form; 2. uploading required documents or having someone assist you (usually a service provided by First Circle); 3. getting your loan approved; and 4. getting notified of your loan disbursement.
Compared to traditional financing firms like banks, online lending companies can process your requirements fast, without requiring any collateral, and approval for a loan can be disbursed in as fast as three to seven business days. If you want to learn more about business financing through Fintech you can read more here.
Fast, Fair, and Flexible Financial Partnership You Can Trust During this Time
In response to the SEC’s memo, First Circle has tried to help ease our customers’ financial burden by offering a 30-day payment holiday. We firmly stand by our mission to provide our customers with fast, fair, and flexible financial partnership especially during this critical time. Since week one, we provided our customers with a payment holiday for those with existing loan plans that have repayment due dates within March 17 to April 17, 2020. Late fees and additional interest for the 30-day extension would be waived during the said period as well.
We continue to be fully operational for those in need of financing for working capital gaps. We have fully transitioned to a remote working setup to ensure that we are able to continuously finance our customers’ projects, working capital requirements, and other daily expenses. All transactions can still be done online at the convenience and safety of their homes.