'Up to 100 million, interest rate in the low to mid 3%'... Toss Bank launches loans for individual business owners

First Internet Bank Launches Personal Business Loans
No Guarantee, No Collateral, No Early Repayment Fees

[Asia Economy Reporter Minwoo Lee] Toss Bank is launching a loan product targeting sole proprietors and small business owners, becoming the first internet-only bank to do so.

On the 14th, Toss Bank announced that it will release an unsecured and collateral-free loan for sole proprietors that can be applied for and executed entirely online. Toss Bank is the first internet-only bank to offer a loan product for sole proprietors.

The minimum interest rate is in the low to mid 3% range per annum (variable rate), with a maximum limit of 100 million KRW. Borrowers can choose between a lump-sum repayment at maturity or equal principal and interest payments. The loan term ranges from a minimum of 1 year to a maximum of 5 years (extendable upon maturity), with no early repayment fees.

The eligible applicants are sole proprietors who hold a business registration number and have been operating their business for at least one year or have generated sales for more than six months recently. The minimum verified annual income must be at least 10 million KRW based on the income certificate.

The entire process from application to execution is 100% non-face-to-face, unsecured, and without collateral. No guarantee from guarantee institutions or collateral such as real estate is required; the credit limit is assigned based on the individual's creditworthiness.

Toss Bank’s proprietary credit evaluation model incorporates screening criteria specialized for small business owners, calculating customized limits and interest rates for customers. Larger sales volume and regular income result in preferential rates and higher limits.

As a follow-up product for sole proprietors, Toss Bank is preparing an online guaranteed loan product called 'Ontact Special Guarantee' in partnership with regional credit guarantee foundations. A Toss Bank official stated, "We expect this product launch to provide timely and practical support to sole proprietors and small business owners affected by COVID-19," adding, "We plan to carefully review customers’ actual repayment ability as well as their actual business operations."

This content was produced with the assistance of AI translation services.