The end of 2017 is fast approaching; before you know it, another year has started. What are your plans for the coming year? Are you inching closer to reaching your financial goals? In one of our previous posts, we discussed some great business ideas which OFWs and their families can put up to gain an additional source of income.
In line with the goals of many of our hardworking OFWs to put up their own business, the Government has come up with a program to help both active OFWs and even our repatriated kababayan make their dreams of having their own business a reality.
Guide to Applying for the OWWA OFW Loan
In case you’ve been out of the loop, the Overseas Workers Welfare Administration (OWWA), in partnership with Land Bank of the Philippines, developed the Reintegration Loan Assistance Program (also known as the OWWA business loan or OFW loan in the Philippines) as a means to assist OFWs and active OWWA members in putting up their own business enterprise in the country. OFWs can loan between P100,000 and P2M with an annual interest rate of 7.5% to jumpstart their business venture. Take note, the loan is only given to provide a working capital for starting a business. Moreover, the OWWA Business Loan can also even be used to expand existing businesses. This is great news for OFWs who are planning to come home and retire in the near future. If the business picks up, there might not be a need for our kababayan to go back and forth abroad to achieve financial independence and to support their family back home.
The opportunity to run your own business is the perfect solution to many of our OFW’s qualms and challenges in leaving the country for work abroad. This way, you can live and enjoy life together with your family without having that big of a burden to look for a regular source of income in the country. But before anything else, let’s get to know the basic requirements to apply for the OWWA business loan:
For OFWs starting a new business venture, you will need to submit the following:
- Duly accomplished OWWA Information Sheet
- A Certificate of completion of the Entrepreneurial Development Training (EDT).
- A well-written business plan detailing the project specifics with a monthly net income of at least P10,000.
- The applicant’s bio-data.
- Business papers such as the Mayor’s permit and Certificate of Registration with DTI.
- If applicable, BIR-approved Financial Statements and your most recent Interim Financial Statements, as well as your Income Tax Return documents in the last three years at least.
For OFWs who need to loan out additional capital for an existing business enterprise, take note of the following requirements:
- Certificate of Registration from DTI
- The Mayor’s permit
- Financial Statements duly filed in the BIR for the past three years
- Certificate of Income Tax return in the last three years
- Statement of Assets and Liabilities of the Business
- The business’s latest temporary financial statement
In addition to the above requirements, you will also have to provide loan security in any of the following forms: real estate mortgage, equipment or machine collateral, a Deed of Assignment on Inventory or receivables, or a hold-out on deposit. This is necessary to prove the borrower’s capacity to pay the loan.
Step-by-Step Guide on Applying for an OWWA loan
Whether you’re starting a new business or loaning for an existing enterprise, you’ll have to go through the following process:
- Pay a visit to the OWWA regional office nearest your area to go through the Entrepreneurial Development Training (EDT) as one of the requirements before you could apply for a business loan.
- Upon completion of your EDT, present your certificate along with all the necessary requirements to Landbank so that they could evaluate and process your loan application.
- Wait for 45 days after you’ve submitted your complete loan application requirements before you can check the status of your application.
- Tip: As always, make sure that you complete all necessary requirements for your business loan application for faster processing and to avoid the hassle of going back and forth for compliance.
If you have been thinking about starting your own business for quite some time now, but haven’t got enough resources to do so yet then this could just be the perfect opportunity for you to get closer to achieving your business goals as an OFW. You’ve been working too hard and you’re not getting any younger – a business venture is an excellent investment you can make to have a dependable source of income, but it also takes careful planning and hands-on effort to successfully grow your business.