Pnb Bank Loan

PNB BANK LOAN Terms and Conditions PNB Small Bank Loans are availed up to a 100 million peso limit. Applicants may avail of two sub-types of the bank loan depending on the purpose, which applicants are required to state. 2 Options: RCL (Revolving Credit Line) RCL’s are allowed for loans for capital purposes (working capital). They mature in one year, and whose principal may be paid within 30 to 360 days (1 year). A feature of the RCL is to reacquire payments already made on the principal should the money be needed again. RCL’s are given notices for loan renewal 3 weeks before maturity. If at maturity the loan principal is paid, the bank reviews applicant performance over the year, and if favorable, another RCL may be offered, although at a slightly lower amount than the initial year loan (percentage decrease not standard, below 10%).

TERM LOANS Term loans are allowed for asset expenditures and operational concerns. They may be paid within three years.

BANK PROCESSING A. Collateral

Bank loans require collateral. It may be real estate or chattel mortgage. The requirements for real estate collaterals include Land Title, Tax Declarations, Lot Plans, and the like. For chattel mortgage, vehicle registration is required, among others. Generally, banks prefer real estate collaterals. B. Loan Computation Loan amount is set by the bank and not the person applying for the loan. It is determined by the collateral’s appraised value. For real estates, these are within 60-70% of collateral value, and 50% for chattel mortgages. The paying capacity of applicant is equally relevant. The projected cash flows of the business is demanded of the applicant. Multiple collaterals are possible to achieve the amount needed for loan. C. Processing Costs Inspection (Appraisal) fee costs P 3,000. A character investigation fee, which is a joint process with DTI and SEC) is a one time cost incurred amounting to P1,500. lastly, Documentary stamps are deducted from the loan amount received, as mandated by BIR of all banks. It costs P1.50 per P1000 of the principal. There is no need to renew appraisal costs for loan extensions or renewals. The investigation covers all stakeholders and involves validating existence of businesses, credit histories, court cases, etc. D. Mode of Payment Upon receiving the loan, applicant makes a promissory note stating payment terms. Generally, it is a compromise between the applicant and the bank on the

mode of payment. Principal may be a one-time payment (usually RCL), or spread out to desired periods (like term loans), where periods may be monthly, quarterly, or yearly. Interest may be accounted for the same way, although interest may be discounted at the start. PNB’s interest rate is between 12-14%. A. Additional Requirements For start-ups, it is usually difficult to acquire a loan and may need a guarantor. However, a good feasibility study is a plus for start-ups. E. Penalties Upon default at maturity, or “past due”, an additional 24% aside the interest is added as penalty per annum. For lengthy past due status, there may be foreclosure of collateral. The applicant is expected to use the loan in the stated purpose. Violation results in acceleration clause, in which the principal and due payments become due immediately.

BANK MANAGER Name: Edilberto R. Marcos, C.P.A. Branch: PNB Meycauayan Branch Employment: Has been a PNB employee for more than 20 years.