The internet has altered the way we conduct business. We can work remotely, communicate with co-workers and colleagues, market to new customers, and send and receive payments if we have access to the internet. Online loans have also become a valuable resource for business owners as a result of the internet.
The days are gone when a business owner had to go to the local bank branch to get a loan. We now have more access to affordable business financing than ever before thanks to the wonders of the internet. With a quick online search and a click of the mouse, we can access a plethora of lenders and loan options.
In this case, small businesses that want to restart operations during the pandemic can set up an account and apply for interest-free, collateral-free government loans. Small business owners can enter their information and upload scanned identity and business documents to the website, which is maintained by a small business organisation that is maintained by a small business organisation which is an attached agency of the Department of Trade and Industry (DTI).
The small business organisation is a programme implementer for the Covid-19 assistance to restart enterprises, which provides P8.08 billion to micro, small, and medium enterprises (MSMEs), cooperatives, hospitals, tourism businesses, and repatriated or displaced Overseas Filipino Workers (OFWs) affected by the Covid-19 pandemic. Under the programme, qualified loan applicants can apply for loans ranging from P10,000 up to P5 million, depending on their pre-pandemic sales and business assets figures, if applicable.
The loans are repayable over a maximum of four years, with a maximum grace period of 12 months for non-tourism MSMEs and a maximum grace period of 24 months for tourism MSMEs accredited by the Department of Tourism (DOT) or registered as a Barangay Micro Business Enterprise (BMBEs).
Online business loans are loans that can be applied for — and received — through the internet. The applicant may also be asked to submit documentation via secure web portals, and web applications can even connect the lender or applicant to the bank account in order for them to access the bank statements directly.
Online business loans differ from bank loans in several ways. Instead of having to drive to a local bank branch to apply for a loan, online loans allow applicants to apply from the comfort of their own home, the office, or any other location with an internet connection. Online loans are also distinct in that the process is much shorter. In some cases, loans can be approved in minutes and funded within days— or even 24 hours.
Successful loan applicants will only need to pay a one-time service fee, set at a maximum of 8% for a four-year loan term. Lower service fees apply to shorter loan terms.
In correspond, OpenGov Asia reported that the Covid-19 crisis has highlighted the need for governments and businesses to provide more e-services, and as more of our daily lives move online, e-services will become critical for efficient operation of both. These e-services are now assisting in getting stimulus funds into the hands of consumers more rapidly. E-government emerged as an important aspect in the delivery of public services. However, some local government e-services only offer interactive content such as application procedures and downloading of forms, and the process takes so long to complete.
The president and CEO of the small business organisation emphasised that it is solely concerned with making funds available to small business owners. He stated that the company’s financing programmes, including the programme, are now fully electronic and operational. As a result, unless they specifically request it, the agency’s MSME borrowers no longer need to visit its offices.