Korea Technology Finance Corporation

Credit Guarantee

Guarantee Operation

Guarantee Facilities View

Guarantee for Bank Loans
This loan guarantee provides repayment guarantees for the loans extended to SMEs by commercial banks. KOTEC compensates for the losses born by the banks should the debtor fails to meet its debt obligation.

Guarantee for Payment Guarantee
Payment guarantee refers to a financial commitment made by financial institutions at the request of buyer in connection with purchase contracts. KOTEC provides guarantee for a variety of domestic and overseas payment guarantees issued by financial institutions. In case the buyer fails to fulfill its payment obligation under the contract, KOTEC conducts its guarantee liability to the financial institutions.

Guarantee for Loans from Non-Bank Financial Institutions
KOTEC also provides guarantees for the loans extended by non-bank lenders.

Guarantee for Corporate Bond
KOTEC provides guarantee to bonds issued by innovative SMEs and traded in the bond market. Payment of principle and interests will be made by KOTEC should the issuer default due to insolvency or bankruptcy.

Guarantee for Purchase of Corporate debentures
Financial institutions can receive guarantee from KOTEC in case when they purchase corporate debentures issued by innovative SMEs.

Guarantee for Commercial Bills
Guarantee for commercial bills refers to the KOTEC's financial commitment guaranteeing issuers' payment of the amount specified on the promissory note issued in connection with a commercial transaction. Bill guarantee shall be provided for the liabilities related with the following instruments: note payable, note receivable and note receivable pledged as collateral.

Guarantee for Securing Commercial Transactions
KOTEC's guarantee is provided as a security for the buyer's liability to pay on the account payable arising in connection with commercial transactions.

Guarantee for Contract Performance
KOTEC extends guarantee for the SME contractors' liability to pay various deposits as a security to ensure faithful performance of the contract they enter into with government or public agencies. Included in this category are bid deposit, contract deposit, payment deposit and maintenance deposit.

Guarantee for Loans Secured by Real Estate
This type of guarantee is provided for the loans a firm obtains by pledging its real estate assets to financial institutions as security. KOTEC's guarantee covers repayment of the part of the loan unsecured by the real estate collateral.

Guarantee for P-CBO
In a bid to help innovative SMEs raise funds through bond market, KOTEC provides guarantees on primary collateralized bond obligations(P-CBO) undertaken by a special purpose company(SPC). P-CBO is a kind of asset-backed security (ABS) collateralized by a pool of risky junk bonds with varying degrees of risks and yields. Risks of the security holders can be mitigated by KOTEC's credit guarantee to the SPC.

Guarantee limit per a company View

KOTEC's maximum guarantee ceiling per a company is 3 billion won.

Exceptional Cases

Up to 5 billion won

Guarantees to Industrial Research Cooperatives

Guarantees extended on the basis of the monetary value of a certain technology determined by the Technology valuation of KOTEC

Guarantees for corporate loans intended for the purchase of raw materials

Guarantees for Technology-Intensive SMEs designated by KOTEC

Up to 7 billion won

Guarantees for trade loans & SME's export loans extended by the Export-Import Bank of Korea

Guarantees for opening of L/C account to import raw materials for goods to be exported

Guarantees for E-commerce and contract performance provided to the Technology-Intensive SMEs

Guarantees for loans secured by export bill of exchange and guarantees for negotiation of the export bill

Guarantees for companies with excellent technologies and companies in green growth industries among KOTEC's key support areas

Up to 10 billion won

Guarantees for fixed asset loans with a few conditions attached including the immediate termination of guarantee contract after banks' collateralization of the fixed assets

Guarantee Limit by technology ratings

The guarantee limit per a company specified above, however, shall not exceed the guarantee limits by technology ratings illustrated in the table below.

Company Overview
Technology Ratings Guarantee Limit

7 billion Won


6 billion Won


5 billion Won


4 billion Won


3 billion Won


1 billion Won


Not Eligible

Guarantee Coverage Ratio View

Partial Guarantee Scheme
The partial guarantee scheme is a risk-sharing mechanism between KOTEC and participating financial institutions where KOTEC gives a irrevocable promise to pay up to a certain percentage of loan amount in the event of borrowers' defaults. Usually KOTEC's guarantees cover 85% of loan balance, and the risks associated with the remaining part of them are taken care of by the financial institutions.

Exceptional Cases

100% coverage

Guarantees for corporate bond, commercial bill and contract performance are structured to cover 100% of each debt obligation, since financial institutions are not involved in each of the guarantee scheme and there are no partners to share risk with.

90% coverage

Guarantees for key support areas including the companies with excellent technologies, companies with excellent export performance, companies engaging in the green growth industry and venture startups

Guarantee for export financing


When otherwise agreed with financial institutions: percentage as agreed

When otherwis specified in a special program: percentage as specified

Guarantee Fee View

KOTEC receives per annum upfront guarantee fees from the guaranteed SMEs for the guarantee amount at the point of issuing the letter of credit guarantee. Basic annual guarantee fee rate is determined by the Technology Ratings assigned in the process of the due diligence. Final rate is calculated by adding or deducing a certain percentage in compliance with rules and regulations within KOTEC.

Basic Rate Determined by Technology Rating

Basic Rate Determined by Technology Rating
Technology Ratings Guarantee Fee Rate


















Maximum & Minimum Rates

Maximum & Minimum Rates
  Minimum Rate Maximum