Person A applied for a 1.4 billion won working capital loan using an apartment in Yangcheon District, Seoul, as collateral. A working capital loan is a product that lends funds such as labor costs and advertising expenses needed for a business operator to run a business. Person A told the bank it was for purchasing raw materials.
However, the day after receiving the loan, Person A paid 1.74 billion won as an interim payment for the sale of an apartment in Seocho District, Seoul. Person A failed to prove that the loan was used to purchase raw materials and was caught during an on-site inspection by the Financial Supervisory Service.
Like Person A, tricks of taking out a sole proprietor loan and using it for purposes outside its scope, such as real estate transactions, are rampant. Since the "6·27 restrictions" took effect in June last year, limiting mortgage loan (mortgage loan) ceilings to 200 million–600 million won, more people have abused business loans as their borrowing capacity shrank.
According to the Financial Supervisory Service, since June last year, an on-site inspection by the Financial Supervisory Service of about 20,000 business loans found 127 cases (58.8 billion won) used for purposes outside their scope. Misuse cases varied, including using business loan funds to repay other loans or lending money to relatives and acquaintances. There was also a borrower who received a 2.2 billion won working capital loan for raw material purchases but remained silent and did not respond to a financial company's request to provide proof of purchase.
There were also cases of using the funds for real estate transactions, such as buying high-priced dwellings or returning jeonse deposits. Person B, who bought an apartment in Yangcheon District, registered the dwelling as a business site and applied for a 350 million won business loan. But after using the loan to return the existing tenant's jeonse deposit, Person B signed a new jeonse contract for the apartment that was supposedly to be used as a business site.
Business loans are divided by purpose into operating and facility investment, initial funding for starting a business, and funding for restarting a business. Using them for purposes outside their scope can be deemed illegal beyond a breach of contract. Banks review business plans and sales data submitted by business operators before lending, and in most detected cases, borrowers failed to prove post-disbursement use matched the stated purpose.
Interest in business loans has grown since June last year, when mortgage loan limits were sharply lowered. Online real estate and loan communities were flooded with promotional posts recommending business loans or claiming they could help even new business operators obtain loans.
The financial authorities plan to immediately recall loan funds when cases of business loan misuse are detected and to notify investigative agencies if they judge the matter serious, such as when documents are fabricated.