Business banking helps SMEs sustain operations amid COVID-19 pandemic

There’s no other formula to survive the COVID-19 pandemic but to adapt to new ways of living. With no assurance of when things will go back to normal, instinct for survival has prompted businesses to adjust their operating models, reassess their position, and make urgent, existential decisions in order to survive.

For the small and medium enterprises (SMEs) in the country, this has been exactly the case since varying levels of lockdown were imposed in late March this year.

Ellana Cosmetics Founder Theresa Carbonel-Buenaflor was not spared from the effects of the pandemic. In fact, she said their homegrown cosmetics brand had to close their physical stores to manage possible losses during the onset of government-imposed lockdowns.

“Half of our company is composed of saleswomen. We call them beauty consultants. They are directly hired. So half of them, basically, had no job when we closed our physical shops,” she said.

But store closures weren’t the only effect of the global health crisis to businesses, there were also concerns on mobility and manpower limitations. This was what Ronaldo Cervantes, owner of R Cervantes Construction Services, had to deal with. Projects were still pouring in, but mobility restrictions remained a challenge.

“The challenge we have now is meeting the deadline of each project without compromising the quality. Undermanned kami ngayon kasi yung ibang workers from the provinces hindi pa bumabalik ng Metro Manila,” he explained.

A similar setback was experienced by Ednalyn Regala, owner of Pampanga-based Sweet Aroma One Stop Baking Tools & Supplies. “During the first month of the lockdown, nag-close din talaga ako. Nagkaroon kami ng bawasan ng staff. Pati sa supplier din kasi nagkaubusan ng stock.”

E-commerce

While some had no choice but to close down, other SMEs adjusted their operations to keep afloat—from reducing expenses to taking advantage of government support. But the common denominator among these three businessmen was their shift to e-Commerce and move to avail of loans to keep a steady cash flow.

“There’s a lot of adjusting. We repurposed our people to allow them to keep their jobs, despite store closures. We’ve transitioned the retail team to a sales team—Telesales. A lot of them were doing direct calls to our customers, to our clients for them to go thru online. It was helpful since we had to sustain our business with only e-commerce, everybody was contributing to the sales earned from this channel. And during this period, we have actually grown three times,” Carbonel-Buenaflor said.

But not all are capable of maintaining their operations just by repurposing employees or digitizing their processes. In fact, the Department of Trade and Industry (DTI) reported that, since ECQ was implemented in March, more than half of businesses in the country had to close down because of unsteady cash flow.

This is where bank loans come in. Ms. Carbonel-Buenaflor, Mr. Cervantes, and Ms. Regala turned to the Bank of the Philippine Islands (BPI) and applied for a business banking loan to keep their businesses operating amid the pandemic.

“We availed the business loan for cashflow because we are still collecting receivables and overhead, especially now that labor is more expensive with the mandatory testing, shuttling everyone back and forth. It is very costly for businesses to operate now,” Carbonel-Buenaflor admitted.

To which, Cervantes seconded, “These factors added to what we can comply: wearing of PPE and rapid test.”

For Regala, she will use the loan to prepare for a post-COVID expansion. “Meron na kaming nabiling lote para mag-expand at lakihan ko yung shop.”

BPI’s Business Banking is ready to listen to the needs of small and medium businesses, and help them pivot towards resilience and growth even in the time of the new normal.

“Our flexible business solutions are designed to help owners sustain their businesses during these challenging times. While many are probably hesitant to avail of loans given the uncertain economic environment, some have considered this as part of resiliency planning,” explained BPI Business Banking Head Eric Luchangco.

"Signing up for a business loan during these challenging times is a calculated risk, but one that helps organizations adjust and cope to the needs of the market,” Mr. Luchangco added.

If there’s a will, there’s a way. Pampanga-based Sweet Aroma One Stop Baking & Supplier store owner Ednalyn Regala did not hesitate to maximize her opportunities with BPI’s business loan despite the uncertainties brought about by the COVID-19 pandemic. Recently, she purchased a bigger lot, in the hopes of expanding her business.

Business advantage. Ellana Cosmetics founder Theresa Carbonel-Buenaflor benefitted from her company’s early pivot to e-commerce in 2007. The cosmetics company grew three times since the pandemic brought more of its sales online. Now, they are transitioning to telesales to complement their digital move.

The lockdown and quarantine restrictions affected the operations of R Cervantes Construction Services, as workers had difficulty traveling to and from construction sites. But owner Ronaldo Cervantes remained steadfast in completing their projects on time, with proper safety and health protocols, and the help of additional bank financing to sustain and expand operations.

Published on October 16, 2020