17 banks are partnering with the Credit Guarantee Foundation to introduce the "growth promotion guarantee" for small businesses. The target supply amount for the guaranteed loans to be launched this time is a total of 3 trillion won.
According to the financial sector on the 10th, 17 banks are developing the growth promotion guarantee products. The target supply for this guaranteed loan is a total of 3 trillion won based on bank loans, with 1 trillion won to be supplied each year over three years. The loan limit is set at 50 million won for individual business owners and 100 million won for corporations. The banking sector, led by the Korea Federation of Banks, has set the goal of launching the product by the end of July and has entered the final stages of product launch, including system development.
The guarantee being introduced this time focuses on growth, as the product name suggests. Small business owners who have recently experienced significant business growth can utilize this guarantee, and the loan funds will be used for purposes such as increasing facilities and establishing business sites for expansion. The growth promotion guarantee is designed to lend on a limited basis to small business owners who have demonstrated business competitiveness, aiming to enhance the policy effect of "strengthening the competitiveness of small businesses."
This growth promotion guarantee will be developed through collaboration between the banking sector and the Credit Guarantee Foundation. Loans will be provided with bank funds, and if losses occur, the Credit Guarantee Foundation will compensate according to the set guarantee ratio. Currently, adjustments to the guarantee ratio are being made within the foundation, and a final guarantee ratio of 90% is likely. From the banks' perspective, as the risk of loss decreases, they can lend more generously to small business owners. Additionally, the growth promotion guarantee is expected to have the largest supply amount compared to the policy guarantees currently operated by the Credit Guarantee Foundation.
The growth promotion guarantee will be launched in the form of a delegated guarantee. A delegated guarantee means that the Credit Guarantee Foundation does not issue the guarantee certificate directly but entrusts the entire process from loan review to certificate issuance to the bank. The Credit Guarantee Foundation is currently creating a checklist that banks will use for guarantee certificate issuance reviews. It is reported that the checklist will include items verifying business growth, such as recent changes in sales and employment. Small business owners in all industries, except for those in antisocial sectors, will be able to apply for the guarantee.
A financial sector official noted, "As the guarantee issuance work is streamlined with the delegated guarantee, we can expect a faster credit provision effect compared to regular guarantees."