The government has decided to provide a guarantee equivalent to 95% of the second small business emergency loan (aka corona loan).

I mean that there is less likelihood of refusal of loans at bank counters, except for obvious reasons such as overdue loans or overdue taxes.

According to the financial authorities, the credit guarantee fund, a policy and financial institution, will provide a guarantee for 95% of the emergency loan amount of the second small business, which starts on the 18th.

When small businesses receive 10 million won in emergency loans, it means that Shinbo will issue a guarantee for 9.5 million won.

If the small business owner does not pay the loan, Shinbo makes a pledge to pay the 9.5 million won instead.

In this structure, banks are in danger of being insolvent only for 500,000 won out of 10 million won.

It can be said that the reason for bank rejection of loans disappears because the small business owners who applied for the emergency loans for small businesses are low credit.

In fact, commercial bank chiefs, who attended the Financial Risk Response Group meeting, chaired by Finance Minister Eun Sung-soo on the 6th, reportedly said that there was not much reason to refuse loans at the window because the applicant for a small business emergency loan was a low-credit person.

It means that you can take risks if you have 5% of coverage except 95% of the guarantee rate.

This has largely dispelled financial authorities' concerns that low-credit creditors may be marginalized from secondary small business emergency loans.

In the case of the first small business emergency loan, which was executed by the government until early May, high credit (1 ~ 3 credit rating) is a commercial bank, medium credit (4 ~ 6 rating) is a corporate bank, and low credit (less than 7 rating) is a small business. The market was distributed to the Korea Market Promotion Corporation (small vacuum).

As the second loan eliminated the small-vacuum window and unified the window into six banks (National, Shinhan, Woori, Hana, Nonghyup, and companies), there were concerns that low-credit customers, not ordinary bank customers, would be rejected.

In the financial sector, it is expected that banks will handle small business emergency loans up to and including low-credit credit ratings.

Considering that banks usually lend up to level 4, the scope of loans is greatly expanded.

Banks will refuse loans to those who have already overdue loans from financial companies or who have paid national or local taxes.

Delinquency or delinquent tax here is not due to the new coronavirus infection (corona19), but refers to the existing arrears and arrears.

In order to receive urgent management funds, you must first resolve any overdue or overdue circumstances.

Overdue or delinquent taxes are taken because it is a low-credit person with a very low probability of repayment after receiving the loan.

Even those who received the first small business emergency loan are also excluded from the second round of support.

With a total of 10 trillion won, the second loan, which is applied from the 18th, can be borrowed up to 10 million won per case, and the interest rate is 3 to 4% per year based on the medium credit rating.

High-credit small business owners with credit ratings of 1 to 3 can use a secondary preservation loan with an interest rate of 1.5% per year.

The secondary preservation loan, which is composed of KRW 3.5 trillion, is the first emergency loan product, and most banks still have financial resources.