Korea SMEs and Startups Agency (KOSME) said on the 20th that it has allocated 198.5 billion won this year for value chain stabilization funds and is accepting applications. The plan is to support the industrial transaction structure so it does not shake from raw material procurement to delivery and payment.
Korea SMEs and Startups Agency (KOSME) this time allocated 139.5 billion won for the co-growth network loan and 59 billion won for accounts receivable factoring, respectively.
The co-growth network loan is a program in which, to build a cooperative ecosystem among large, mid-sized, and small corporations, when an ordering corporation that has signed an agreement with Korea SMEs and Startups Agency (KOSME) recommends a small corporation that has won a contract, Korea SMEs and Startups Agency (KOSME) provides a short-term, low-interest production loan. Korea SMEs and Startups Agency (KOSME) receives the delivery payment from the ordering corporation and repays the loan.
Eligible applicants are small corporations with contract awards that have transaction records within the past year with ordering corporations that have agreements with Korea SMEs and Startups Agency (KOSME). The support limit is up to one-third of sales (up to one-half for manufacturing), with a maximum of 1.5 billion won and an outstanding balance limit of up to 2 billion won.
Korea SMEs and Startups Agency (KOSME) will expand the recommendation limits by ordering corporation this year to strengthen win-win cooperation. The limit was raised to 20 billion–25 billion won for large corporations and 15 billion–20 billion won for mid-sized corporations.
Accounts receivable factoring is a system in which a public institution purchases the trade receivables of a supplying corporation to provide early cash payment and helps ensure that the counterparty's default risk is not transferred to the supplying corporation.
Eligible applicants are small corporations that have settlement of account financial statements for the past three fiscal years and have transaction records of at least one year (three or more transactions within the past year) with purchasing corporations. Support is provided up to a maximum of 1 billion won within one-third of annual sales (within one-half for manufacturing).
Starting this year, Korea SMEs and Startups Agency (KOSME) will allocate a separate budget for corporations located outside the Seoul metropolitan area and plans to identify excellent corporations in each region.
Applications for the network loan and factoring are processed entirely online and non-face-to-face. Details are available on the Korea SMEs and Startups Agency (KOSME) website.
Kang Seok-jin, chair of Korea SMEs and Startups Agency (KOSME), said, "The network loan and factoring are core financial services that help small corporations secure funds smoothly in the production and sales stages."