Shinhan Card Launches "Weekend Loans Based on Card Payment Approval Amount" ... "Industry First"
Small Business Franchise Owners Can Receive Card Sales Payments in Advance on Saturdays and Sundays
[Asia Economy Reporter Ki Ha-young] Shinhan Card announced on the 3rd that it will be the first in the industry to start 'weekend loans based on card payment approval amounts.' This is to secure operating funds for small merchants who suffer from cash flow difficulties due to the non-payment of card sales proceeds on weekends.
Any small merchant with annual sales of 300 million KRW or less, who has generated sales for more than three months and has good credit, can apply, and the loan is available at a fixed annual interest rate of 5%.
This loan can only be applied for on Saturdays and Sundays, and up to 80% of the total approved amount from Thursday of that week to the application day can be provided as a loan. It operates as a negative loan to minimize the impact on credit ratings.
Loan repayment is automatically made through the card merchant payments issued from the next business day, so no separate repayment procedure is required. Weekend loans based on card payment approval amounts can be applied for on the Shinhan Card website.
The Financial Services Commission changed the regulation from today to allow card companies to provide loans secured by card sales receivables to small merchants only to resolve their weekend and holiday operating fund difficulties, which had been prohibited until now. This change considers the frequent cases where some small merchants suffering from cash flow problems receive high-interest loans secured by card sales receivables through private lenders.
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A Shinhan Card official said, "We launched the weekend loan based on card payment approval amounts in line with the Financial Services Commission's policy to resolve the operating fund difficulties faced by small merchants," adding, "Based on Shinhan Financial Group's ESG strategy, we will continue to strengthen support for small business owners struggling with management difficulties due to the novel coronavirus infection (COVID-19)."
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