Technology Application and Promotion Institute VENTURE FINANCING PROGRAM GUIDELINES FOR PURCHASE ORDER (PO) FINANCING PROGRAM

Transcription

1 Technology Application and Promotion Institute VENTURE FINANCING PROGRAM GUIDELINES FOR PURCHASE ORDER (PO) FINANCING PROGRAM Program Description The Program is a specialized venture financing facility of the Technology Application and Promotion Institute (TAPI) that advances the cost of raw materials to facilitate purchase orders of qualified small and medium enterprises (SMEs). It is a funding assistance that allows proponents to finance the fulfillment of irrevocable sales orders or contracts with credit worthy customers. The terms of each purchase order is specific only for the purchase of direct materials needed to deliver the goods to the customers. Objective(s) The Program aims to: Provide financial support for the purchase of direct materials needed to deliver goods to the customers; and Assist companies with financial difficulty to fulfill customer purchase orders (PO), meet sales goals in domestic as well as export markets to surpass its current working capital limitations. Assistance Coverage The Program shall cover the cost of raw materials needed to produce products/goods for a specific requirement of the target market, as reflected or based on the irrevocable POs to be refunded by the proponent without interest. Eligibility Filipino owned SMEs; Priority will be given but not limited to POs of TAPI assisted SMEs including beneficiaries of the Small Enterprise Technology Upgrading Program (SETUP) and other assistance programs of the various agencies of the Department of Science and Technology (DOST); The purchase order may be fully funded for meritorious projects (pls. see criteria) subject to the recommendation of the Technical Evaluation Committee (TEC) and approval of the TAPI EXECOM. Purchase Order Financing Facility of TAPI s Venture Financing Program_Jan2012 Page 1 of 5

2 Criteria 1. In line with the priority sectors of the DOST (ie. ICT, Renewable Energy, Biotechnology, etc.); 2. With existing local and/or foreign market; 3. Have valid purchase orders supported by a Letter of Credit which acts as an irrevocable guarantee of refund in accordance with the agreed schedule; 4. Has paid/refunded at least 34% of its total existing financial assistance from TAPI, SETUP and other DOST funding agencies; and 5. With good credit standing/record. Requirements 1. Letter addressed to TAPI Director requesting assistance for purchase order financing, to include the following: Copy of valid purchase order/s; Brief status of the project; Audited Financial Statement; Detailed cost of raw materials requirement; Copy of purchase/sales commitment or arrangement, if any 2. Endorsement by the DOST Regional Office together with a copy of Regional Technical Evaluation Committee (RTEC) Report. 3. The proponent should provide the production and labor costs, services, other operating expenses and the remaining cost of raw materials, if applicable, as counterpart funding. The project should feature: (1) substantial technological, environmental advantages and socio-economic benefits; and (2) application/use of the technology/equipment will increase efficiency/productivity Investment Recovery The Program s funding assistance will be recovered through refund of TAPI s principal investment without interest over a period of not less than three (3) months after the purchase orders have been served. The proponent shall be required to submit post-dated checks upon signing of a Memorandum of Agreement (MOA) representing the total amount of assistance, the number of which is equivalent to the agreed refund schedule of the project to be indicated in the MOA. The refund schedule will be followed strictly and restructuring of the said schedule is inadmissible. Project Cost The Program shall cover the direct cost of raw materials needed to produce the products/goods, subject to the recommendation of the TEC and approval of the TAPI EXECOM. The proponent on the other hand, shall cover the production and labor costs, services, other operating expenses and the remaining cost of the raw materials needed, if applicable. Purchase Order Financing Facility of TAPI s Venture Financing Program_Jan2012 Page 2 of 5

3 Monitoring and Review Regular monitoring of project status shall be conducted by the Program Manager and concerned Provincial S&T Officer (PSTO). Monitoring and review shall be undertaken based on output and time-bound performance milestone established for each project or when need arises. Purchase Order Financing Facility of TAPI s Venture Financing Program_Jan2012 Page 3 of 5

4 PURCHASE ORDER FINANCING PROGRAM PROJECT EVALUATION PROCEDURE Request for PO Assistance 1. Proponent submits request/proposal for assistance thru the Office of the Director (OD) of TAPI. 2. Venture Financing Program Unit checks completeness of requirements and acknowledges receipt of the request within three (3) working days indicating initial action taken. 2.1 If the proposal has not been endorsed by the Regional Director (RD) concerned, the Regional Office (RO) through its Regional Technical Evaluation Committee (RTEC) will be requested to conduct an evaluation of the proposal; 2.2 If the proposal is not complete, the proponent is requested to submit a complete project proposal including other documentary requirements within fifteen (15) calendar days. If no written response is received within the period, the proposal is deemed withdrawn/dropped. TAPI notifies proponent of decision to drop project 2.3 If the requirements are complete, proponent shall be informed that his request proposal is being evaluated. 3. A Technical Evaluation Committee (TEC) shall be created to assess the merits of the proposal and RTEC Report. TEC recommendation shall be forwarded to the Program Manager/Chair of the Committee within five (5) working days after receipt of the complete proposal. 4. TEC endorses the request/proposal for TAPI Execom approval. Otherwise, the request/proposal shall be disapproved. 5. TAPI informs the proponent and the DOST Regional Office of the decision in writing within five (5) working days after the approval/disapproval. 5.1 If the proposal is disapproved, TAPI informs the proponent and RO concerned accordingly. 5.2 If the proposal is approved, TAPI prepares necessary documents. Approved Request for PO Assistance 6. Venture Financing Program Unit prepares approval letter and corresponding Memorandum of Agreement (MOA) for signature of parties concerned (proponent, DOST ROs, TAPI) within three (3) working days. The MOA shall contain most improtantly the refund schedule for TAPI s assistance. The MOA shall stipulate among others, the following terms and conditions: Purchase Order Financing Facility of TAPI s Venture Financing Program_Jan2012 Page 4 of 5

5 6.1 Investment Recovery - The Program s funding assistance will be recovered through refund of TAPI s principal investment without interest over a period of not less than three (3) months after the purchase orders have been served and/or payment by the client has been secured. The proponent shall be required to submit post-dated checks representing the total amount of assistance, the number of which is equivalent to the agreed refund schedule of the projects to be indicated in the Memorandum of Agreement. 6.2 Submission of reports - The proponent shall submit, thru the concern DOST Regional Office, progress report, financial statements and audited financial reports with audit certificates duly signed by a Certified Public Accountant (CPA). 7. Venture Financing Program Unit sends approval letter to the proponent together with the Memorandum of Agreement (MOA) with parallel advice to the DOST Regional Director (RD). Statements of undertakings by all parties are also indicated. 8. Venture Financing Program Unit facilitates signing and notarization of the MOA. After notarization of the MOA, the unit will facilitate the documents needed for fund release based on approved schedule. TAPI shall release the funds to the DOST Regional Office that will later release the same to the proponent. 9. Post-Dated Checks (PDCs) shall be submitted by the proponent to TAPI upon signing of MOA. PDCs will be acknowledged and forwarded to FAD-Cashier. Photocopies of the PDCs will be retained in the project file for reference. 10. Venture Financing Program Unit and TAPI Cashier shall be responsible for the monitoring of PDCs. TAPI Cashier shall deposit PDCs when due and will strictly follow refund schedule. PO Financing Approved Projects 11. Venture Financing Program Unit monitors project implementation. 12. Project Liquidation proponent shall submit thru the DOST Regional Office to TAPI the original copy of the Audited Financial Report (AFR) of the financial assistance. The report shall be forwarded to TAPI-FAD for the liquidation of the funds provided. 13. The PM shall pursue the completion of the project as stipulated in the MOA. Project is considered completed upon full recovery of TAPI s investment, certified by TAPI- FAD and full liquidation of project funds. Purchase Order Financing Facility of TAPI s Venture Financing Program_Jan2012 Page 5 of 5