EXECUTIVE SUMMARY

(LENDING/FINANCING)

A. Licensing and permitting considerations

 Come up with a good business name.

 Duly registered corporation (highly recommended)
 Decide who will comprise the incorporators and officers
 Agree on capitalization
 Government agencies to be dealt with would be DTI, SEC, BIR,
LGU’s for the business permits

B. Basic Organizational Structure

CEO/BOARD

Manager

Legal Accounting Credit Inv. Cashier

Appraiser Collection

C. Financing schemes to be offered. There are three (3) types of

financing services to be offered to clients, to wit:

 Character Loan - This is an unsecured loan that is made

because of the lender's faith in the borrower's reputation and
credit.
o Target clients:
 LGU Employees
 Elected Officials
 Teachers
 Pensioners
 Government employees
o As part of the package an Accident Insurance will be
required from the clients.
  Chattel Loan – a loan arrangement in which an item of
movable personal property acts as security for a loan
o Acceptable securities: (Brand new or second hand)
 Cars
 SUV’s
 Trucks
 Buses
 Heavy Equipments
 Other chattels

 Real Estate Loan - mortgage loan secured by a lien on a real

estate property.
o Acceptable securities:
 Commercial
 Residential
 Agricultural
 Aquaculture
 Industrial

D. Character Loan requirements and estimate of the computation

1. For LGU/Government Employees

 Requirements:
o Must be a regular employee duly certified by the
HRMO or if possible, by the Mayor.
o Must have 2 co-makers (1 is the dept. head who is the
immediate superior of the employee and his co-
employee in the same department) who are likewise
regular employees
o The co-makers must also be qualified to secure loan
based on their net income salary to be determined by
the company
o Terms: Not less than 1 year but not more than 3 years

Important Note:
o Co-maker’s liability is solidary. They will be required to
co-sign the loan agreement binding themselves to such
liability.
o To ensure 100% collection, clients shall authorize the
Treasurer or the disbursing officer of the LGU to do
immediate deduction before disbursement of salary.
We will only deal with the Treasurer or the disbursing
officer as the case may be.
 o Our withholding/collecting officers from site, will be
paid regularly, the amount of which, will be determined
by the company.
o If the principal dies, the insurance coverage will be
applied to the current obligation of the client. If
obligation is not satisfied, co-makers will continue to
pay the remaining obligation under the same terms of
the loan, which is on monthly basis via deduction.

EXAMPLE on 1 year term @ 15% interest per annum:

MR. JUAN DE LA CRUZ Net Salary P 20,000.00

Loanable Amount 70%

P 20,000 x 70% = P 14,000

P 14,000 x 12 months = P 168,000.00
+ 25,000.00 (15% interest)
_______________
P 193,200.00

P 193,200.00/12 months = P 16,100 monthly payable

(amount we collect monthly)

Other charges: P 168,000.00

Processing Fee: 3% 5,000.00
Insurance (say) 1,000.00

NET PAY OUT P 162,000.00

2. For Elected Officials (Punong Barangays, Barangay Kagawad,

Mayor, Vice Mayor, Councilors)

 Requirements

o Must have 2 co-makers (for LCE’s, the vice mayor and

one of the councilors and for PB, any of the barangay
Kagawad)
o Non-elective officials are not accepted as co-makers
o The co-makers must also be qualified as the principal
to secure loan based on their net income salary to be
determined by the company
o Terms: Not less than 1 year but not more than 3 years

EXAMPLE on 3 year term @ 15% interest per annum:

MAYOR JUAN DE LA CRUZ Loanable Amount P 500,000

 P 500,000.00
+ 225,000.00 (45% interest)
_______________
P 725,000.00 (total obligation)

P 500,000.00/36 months = P 20,1239 monthly payable

Other charges: P 500,000.00

Processing Fee: 3% 15,000.00
Insurance (say) 1,000.00

NET PAY OUT P 484,000.00

3. For Teachers/DepEd Personnel

Requirements:
o Letter of guaranty to be issued by the District
Supervisor (DS)
o Certification of Net Pay signed by the DS
o Co-Maker is the spouse and one member of the family
who is of legal age and a fixed earner