Kibo Launches 'Accounts Receivable Factoring Service' at Nationwide Branches

Convert Accounts Receivable to Cash Without Worrying About Default... Total Support of 40 Billion KRW This Year

[Asia Economy Reporter Kim Cheol-hyun] The Korea Technology Finance Corporation (Chairman Kim Jong-ho, hereinafter referred to as Kibo) announced on the 8th that it will carry out a total of 40 billion KRW scale 'Accounts Receivable Factoring Project' nationwide this year in accordance with the Ministry of SMEs and Startups' implementation of the 'Accounts Receivable Factoring Supply for Small and Medium Enterprises.'

Factoring is a short-term financial service that provides funds by transferring accounts receivable, and Kibo directly supports funds to small and medium enterprises. Through this project, Kibo purchases accounts receivable without recourse, advances the payment to the selling SMEs, and collects the payment directly from the purchasing companies at maturity. A discount rate of 2.5% to 6.5% per annum is applied when purchasing accounts receivable.

The support targets are new technology businesses with excellent technological and business feasibility that have transaction records with purchasing companies at least twice in the last six months. The eligible receivables are electronic tax invoice-issued accounts receivable arising from ordinary commercial transactions, amounting to 10 million KRW or more, with maturity within 90 days. The support limit per company is up to 3 billion KRW for both selling SMEs and purchasing companies, within half of the sales amount.

Kim Jong-ho, Chairman of Kibo, said, "Existing accounts receivable secured loans have a repayment obligation, so SMEs have borne the risk of chain bankruptcies. SMEs using Kibo's accounts receivable factoring can quickly convert accounts receivable into cash without worrying about bankruptcy, which is expected to greatly help in fund circulation."

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