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Mini Performance


Pimentel, Angelie Jane D.

Any bank or cooperative loan is a very practical option for entrepreneurs who want
to finance their new business, you and your siblings are about to start a new business, and
you are thinking of getting a loan to finance your business. You will call the hotline of the
assigned bank or cooperative to inquire about their business loan products. You are to ask
for the details of their Business Development Loan Facility by using the following questions
as guide:

1. How can be anyone avail of the loan facility?

The Business Development Loan Facility is a lending facility of the Social Security
System designed to contribute to the nation's economic growth and development by
providing financial assistance to the business sector for the purpose of increasing
productivity and enhancing potential earnings through expansion, diversification and other
business development projects. It also aims to support the government's program of
invigorating economic activity and providing more employment opportunities.

2. What are the purposes of the loan?

The loan may be used to finance any of the following:

a. Major repairs, particularly for dilapidated and structurally unsafe housing units;
b. Improvements which shall apply to:

i. Extension or expansion and enhancement of economic and aesthetic value of an

existing housing unit. Said improvements shall be permanently attached to the
ii. Completion of an occupied bare house.
iii. Construction of concrete fence and steel gate.
iv. Installation of deep well and motor pump.
In Salary Loans, a cash loan granted to an employed, currently- paying self-
employed or voluntary member. It is intended to meet the member's short-term credit
needs. The Housing Loan for Repairs and/or Improvements is a lending program of the
Social Security System available either directly from the SSS or thru its accredited
Participating Financial Institutions.

3. How much is the loanable amount and the interest rate?

The maximum loanable amount shall be the lowest of the following, provided the
borrower's debt-equity ratio after financing shall not exceed 3:1 and that its total loan with
the SSS shall not be more than five percent (5%) of the SSS Investment Reserve fund (IRF):

1. Amount of loan being applied;

2. Actual need of the borrower (total project cost)
3. Loan value of the assigned collateral or securities; or
4. Maximum of P500.00 million per borrower.

The interest rate of the loan shall be the prevailing fixed rate. The interest rate for
the loan is 9% per year. The interest rate of the loan may be variable or fixed based on the
prevailing SSS pass-on rate to PFI plus PFI's spread. The prevailing interest rates shall be
reviewed monthly. When repricing, loans with a payment term of not more than 15 years
shall bear a fixed interest rate. Loans with a payment term beyond 15 years shall bear a
fixed interest rate only during the first 15 years of the loan term but thereafter shall be
subject to re-pricing every five years starting on the anniversary month of the 15th year.

4. What are the terms/conditions of the loan?

The following terms, as used herein, shall mean as follows:

SPF ENROLLEE refers to an SSS member who has successfully enrolled in the SPF
Program but has yet to personally confirm the SPF Enrollment Form and/or has yet
to make an SPF contribution.
SPF MEMBER refers to an SSS member who has successfully enrolled in the SPF
Program, confirmed his/her SPF Enrollment Form and has made his/her first valid
SPF contribution. He/she shall remain an SPF MEMBER until the filing of his/her
retirement, total disability or death claim.
Working days, for purposes of processing and crediting of investment earnings,
withdrawals and benefits, refer to regular SSS office hours (8:00 AM 5:00 PM)
from Mondays to Fridays, except declared national holidays, and local holidays and
work suspensions in the National Capital Region (NCR).
Valid contribution is the contribution made in the SPF after successful enrollment
in the SPF Program, subject further to the rules on SPF contributions.

The loan shall be payable quarterly, semi-annually or annually and shall have a
minimum term of five years up to fifteen years inclusive of a maximum five years grace
period on principal payment. Loan with a term of more than fifteen years up to twenty-five
may be allowed for special projects. The loan is payable in multiples of five years up to a
maximum of term of 20 years except for OFW which have a maximum term of 15 years.
However, the loan term shall be subject to the following:

a. The principal borrower's age shall not exceed 65 years old at the time of loan maturity;
b. The loan term shall not exceed the economic life of the house after repairs and/or
improvements are introduced as determined by the SSS appraiser.

Other conditions:

Any overpayment on a previous loan shall be applied to the subsequent loan, if any.
Otherwise, the overpayment shall be refunded upon request of the member-borrower. The
member-borrower shall notify the Member Services Section of the nearest SSS branch of
any change in address/employer thru mail/email/over-the-counter (OTC). The notice
should include the SS number, name and signature of the member-borrower.
5. What are the acceptable collaterals?

The loan shall be secured by any collateral acceptable both to the PFIs and the SSS
provided the loan is fully secured. The acceptable collateral for the loan is the Transfer
Certificate of Title/Original Certificate of Title/Condominium Certificate Title
(TCT/OCT/CCT) registered under the Torrens System issued by the Registry of Deeds in
the name of the principal borrower and/or his spouse free from liens and encumbrances.
The loan shall be secured by a first mortgage on the lot and house proposed to be repaired
and/or improved. In case of loans thru the PFIs, a joint first mortgage for the SSS and the
PFI is required.

The following are not acceptable as housing loan collateral:

a. Land type other than residential

b. Less than 15 sq. meters floor area, in case of condominium
c. Less than 32 sq. meters lot area
d. Road right of way is less than 1.5 meters
e. Free/Homestead/Misc. Sales Patent Titles