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Eligibilty & etc
홈  >  Service of KOTEC >  Technology Guarantee >  Overview
For SMEs, obtaining lending facilities of the financial institutions, in particular commercial banks, constitute an essential part of their growth strategy. However, SMEs in Korea find it difficult to borrow from lending institutions.

The reason why SMEs, even those with high growth potential, have limited access to institutional finance are as follows: Lending to SMEs is considered to be risky. The uncertainty facing small industry and their vulnerability to market and economic changes make banks reluctant to deal with them; Banks and financial institutions are biased in favor of lending to large corporate borrowers; And, among other reasons, SMEs seeking loans are unable to provide securities or collateral for the loans.

In an attempt to help SMEs overcome above difficulties in financing, KOTEC launched its technology guarantee service. Various technology guarantee schemes were set up with the purpose of covering the losses incurred when borrowers default on loans. The purpose of such schemes is also to encourage financial institutions to lend to SMEs with viable projects and good prospects of success but which are unable to provide adequate collateral or which do not have a suitable record of financial transactions to prove that they are creditworthy.

The general des c r i p tion of the usual process of technology guarantee schemes is as follows. A potential borrower who cannot meet a bank's lending criteria --which usually means the borrower cannot provide satisfactory collateral--is referred by banks to KOTEC. Staff in branches carry out independent appraisal of loan guarantee application to investigate the borrowers' creditworthiness, the use to which the loan is to be put, his prospective ability to service the debt, and above all, the superiority of technology. In most cases, the banks rely on investigation and approval by KOTEC for their decision of the loan extension. If it is found that the case is suitable for a guarantee, the borrower returns to the bank with a letter of guarantee issued by KOTEC and take out the loan. Usually, the guarantee involves the payment of guarantee fee, whose amount depends on the size of the amount being guaranteed.





Meanwhile, in order to implement a more fair and transparent guarantee examination, KOTEC launched Cyber Branch Office and developed a self-diagnosis service with which an enterprise can be evaluated and diagnosed of its credit status using the credit assessment simulation model, which is based on financial data that the client inputs on its own. After filing documents with KOTEC, the whole procedure from application to its final results is fully disclosed to all the applicants through the Internet.