Understanding Guarantees and Bonds
What are Guarantees and Bonds?
The Citizen Entrepreneurial Development Agency (CEDA), an agency dedicated to developing viable, sustainable citizen-owned business enterprises, provides bridging finance. This is money lent to a client over a short term (not exceeding 12 months), to be repaid from moneys due to the client. The loans are available to individuals or companies owned by citizens aged 18 or over, whether starting a new business or expanding an existing one.
Conditions
Loan Amount, Period, and Interest Rate
Loan period
- The repayment period depends on the receipt of expected moneys used to clear the debt, not exceeding 12 months. Monthly repayments are not typically required; instead, a bullet repayment is made using the received moneys.
Loan Amount
- Bridging finance loans range from P500.00 to P4 million.
Interest rate
- Loans up to P500,000 are charged 5% interest per annum.
- Loans exceeding P500,000 are charged 7.5% per annum.
Simple Application Process
What You Need to Apply
The requirements are as follows:
- Historic financials (for operating projects)
- Financial projections
- Company resolution to borrow
- Certified copies of Directors’ IDs
- CVs of Directors and/or Management
- Form 2
- Copy of licence to operate the business
- Tax Clearance Certificate
- Personal balance sheets of Directors
- Company profile/business brief (new projects)
- Market evidence (e.g., tender awarded, purchase orders, contracts)
- Letter of request
- Certificate of incorporation
- Share Certificates
- Quotations from suppliers
