FINANCING COMPANIES

Abigail Exconde Elsie Ann Garcia Criselda Malabanan

Almira Panapio

FINANCING COMPANIES
FUNCTIONS AND ACTIVITES
The primary function of finance companies is to make loans to individuals and corporations. Finance companies do not accept deposits, but borrow shortand long-term debt, such as commercial paper and bonds, to finance the loans. The heavy reliance on borrowed money has caused finance companies to hold more equity than banks for the purpose of signaling solvency to potential creditors. Finally, finance companies are less regulated than commercial banks, in part because they do not rely on deposits as a source of funds.

Personal Loans One of the most common functions for finance companies is the distribution of personal or individual loans. These are loans to individuals not affiliated with any business, and designated for personal uses. The most common type of individual loan is the home loan or mortgage, but of smaller loans, such as auto loans, are also popular. Business Loans Business or commercial loans are granted to businesses for use in an enterprise. There are many types of business loans, and finance companies may handle any of them. Some businesses may want money to buy assets like property or equipment, while others want a loan for their first major supply purchase, or a bond payout they cannot currently afford. Business loans are often larger than individual loans and make the finance company more money on interest. Poor Credit Help Through a finance company, borrowers with poor credit will usually have access to funds otherwise unavailable through traditional bank lenders or unsecured credit cards. Because borrowers put up collateral to secure a loan, finance companies are more likely to lend money to poor credit risks. The loan will involve a higher interest rate, as the finance company will want to recover its exposure through several early payments. Although finance companies are amenable to lending money to people with poor credit, there will still be other requirements to be satisfied to secure the

disbursement of funds. The borrower must be employed or have a verifiable income source. The finance company will not lend money if there is no apparent means to repay the loan. The finance company will also require serial numbers and identification information for the collateral. Finally, a verifiable address is necessary. Without a verified means for the finance company to contact the borrower, there is little likelihood the loan will be approved. Major Purchase Financing Consumers can access money through a finance company for major purchases such as appliances, used cars, electronics, musical instruments and other big-ticket items. Finance companies often work directly with retailers selling such items. As the finance company is already aware of the retail value, depreciation and resale value of the item, securing the financing is often quicker than going through another funding source. The money will be made available for financing 100 percent of the retail price. This eliminates the need for any sort of down payment. Cash Resource Finance companies will also lend cash directly to borrowers. Although prospective borrowers with very poor credit may not secure a loan, finance companies are an excellent source for quick funds for people in most credit situations. The finance company can provide money quickly for medical emergencies, unforeseen home or education expenses, or financing a vacation trip. Borrowers will be asked for the reason for the loan; a simple "personal expenses" answer will be satisfactory.

COMPANIES/INSTITUTIONS IN THE PHILIPPINES

1. AG FINANCE, INCORPORATED Unit 2205A East Tower Philippine Stock Exchange Centre Exchange Road, Ortigas Center, 1605 Pasig City MARIO M.TONGSON(PRESIDENT) AG Finance, Inc. is a micro-finance company catering to workers here and abroad. Our company started its roots in 2001 by providing Salary Loans to permanent rank and file employees of reputable companies in the Philippines. Local client companies are able to free themselves from the administrative and capital costs of processing and handling employee loans by availing of our services. They are able to focus their funds and resources to their core business. In 2003, AG Finance saw a great demand in the deployment of Overseas Filipino Workers (OFWs). The Company expanded its market coverage to Filipinos aspiring to provide a better life for their families by dedicatedly working abroad. We understand the OFWs need to invest in their families' future. We offer access to immediate funds for pre-deployment and relocation expenses to migrating professionals through our OFW Financing Program. With over a decade of experience in the overseas market, AG Finance has grown to be a well known player in OFW Financing industry. AG Finance is committed to bringing the world a little bit closer to Filipinos and in making the Philippines a bigger part of the globe through dedication and service to our fellow kababayans' here and abroad.

2. FINACORE Technology Finance Unit 903 Philippine Axa Life Center, Sen. Gil Puyat Avenue Makati Metro Manila CYRIL C. ROCKE(CHAIRMAN) FINACORE Technology Finance was established in Manila, Philippines in early 1997 by a group of European and Asian investors and professionals, who combine extensive experience in financial and banking services. In 2001, an affiliate was established in Singapore: FINACORE PTE LTD, to offer cross border leasing within the ASEAN region and act as holding company for ASEAN affiliates. The expertise of FINACORE includes long term finance, corporate finance, project and asset-based finance, credit administration and compliance with local and international banking regulations. The technical expertise is associated with firsthand knowledge of the ASEAN business environment. The Philippine Securities and Exchange Commission (SEC) has granted FINACORE an authority to operate as a finance and leasing company in accordance with Republic Act. No. 5980, in January 1997. Likewise in April 2001, the Government of Singapore granted to FINACORE Pte Ltd, the license to extend leasing and financing facilities in Singapore (exemption from the Money Lenders Act). FINACORE can also offer its services in other ASEAN countries, such as Indonesia and Thailand, through third party associated finance companies.

3. Rizal Leasing and Financing 5th Flr., GPL Bldg.2231 Sen. Puyat Ave Makati City Yuchengco Group of Companies or YGC Rizal Leasing and Finance Corporation is a non-bank financial institution with a quasi-banking license granted by the Bangko Sentral ng Pilipinas (BSP). Established as United Finance Corporation in 1957, the company was renamed IFC (Integrated Finance Corp.) Service Leasing and Acceptance Corporation in 1962 and then, First Malayan Leasing and Finance Corporation (Malayan Leasing) in 1982. It became a subsidiary of the House of Investments in 1995. In 2012, the BSP approved the purchase of Malayan Leasing by RCBC. Rizal Leasing serves the requirements of corporate, commercial and consumer markets through its innovative loans, leases and investment products. Its products include Money Market, leasing, direct loans, inventory financing, receivables financing, equipment financing, insurance premium financing and discounting installment papers.

4. Manila Credit Corp. 1177 DON CHINO ROCES AVENUE CORNER BAGTIKAN STREET 1203 MAKATI CITY, PHILIPPINES ROLAND H. GARCIA (PRESIDENT)

MANILA CREDIT CORPORATION (MCC) was incorporated on June 1977 and was granted by the Securities and Exchange Commission (SEC) a Certificate of Authority to operate as a financing company on the same year. MCC started its financing operation with an initial capital of only P500,000.00. Mainly, it served the needs of both land-based and sea-based overseas contract workers (OCWs) deployed by its affiliate companies, Trans-Phil Marine Enterprises, Inc. and Trans-Phil Manpower Resources, Inc. MCC also served as the venue for the optimum utilization of surplus or idle funds of the entire Trans-Phil Group. As resources grew, MCC expanded its reach. It started to serve outside borrowers offering a wide array of financing services and promoting them as it competed head on with small 5-6 private lenders, lending investors, other financing companies, rural banks and other consumer banks. Here, a significant shift in the companys portfolio began and at present, the bulk of MCCs market (or about 98% of outstanding loans) are small to medium entrepreneurs or businessmen who mortgage either real estate or chattel assets as securities for their working capital loans. Secured lending has become a standing policy intended to shield the company from any adverse development in our volatile business or economic climate. The remaining 2% refer to its original loan sources composed mainly of contract workers and employees. While many financing companies, even big banks, have come and gone over the years, MCC has gradually flourished, continued to adapt and innovate to its ever-changing market conditions and has grown as a solid and respected firm in the financing industry prudent and cautious in its business and lending policies. Today, MCC remains steadfast and eager to meet the challenges of the future