Citi Bank

Summary

Loan product to support smooth purchasing activity of a company.

Product Overview

Product Background: -This is a program introduced in an effort of improvement of the promissory note system by the government where a loan is extended to the buyer for payment of purchase cost of goods to the seller in cash.
Expected Benefits: - Buying Company : Support in terms of tax administration including tax credit; - Selling Company: Collection of goods proceeds in cash
Advantages of Citibank Product: - Low cost loan as its source is the borrowing from the Bank of Korea.
Eligible Companies: -All the corporate in Korea which purchase goods (including services)
Required Documents: - Agreement on Transaction; Document evidencing commercial transaction such as Tax Voucher, etc.

Information on Purchase Loan Related Government Support Program

The program is to support SMEs at a comparatively lower cost.
Tax Credit (Corporate Tax and Income Tax): - Eligibility: Buyer must be a SME. In case the buyer is a large sized company, seller must be a SME.; - Amount: (Payment Amount for the past 30 days - Payment Amount in Promissory Notes)*0.3% + (Payment Amount for the period between past 31 days and 60 days - Payment Amount in Promissory Notes)*0.15%; - Maximum Amount: 10% of the calculated tax amount
Reflect to Selection Criteria of Adjustment for Taxable Income: - Reflected to the selection criteria so that the company with high usage of the Purchase Loan can be excluded from the Adjustment for Taxable Income.
Favorable Treatment for Bidding Process of Government’s Procurement: - When payment amount for purchase in bills of exchange is 200% or more of that in promissory notes, 3 points, 100% or more, 2 points, 30% or more, 1 point, and below 30%, 0.5 point will be added.
Relief of Sanction against Unfair Subcontract Activity: - Sanction against unfair subcontract activity will be relieved for the company who maintains high ratio of cash payment
(including payment by the Purchase Loan), if applicable.; - Companies with ratio of payment in cash of 60% or more and less than 80%: Reduce black mark 1 point.; - Companies with ratio of payment in cash of 80% or more: Reduce black mark 2 points.
Strong Support in Credit Guarantee by Korea Credit Guarantee Fund (and Korea Technology Credit Guarantee Fund: - Eligible Companies: SMEs and Large sized companies which do not belong to the top 30 business groups; - Guarantee Limit: 10,000,000,000 Won per company; - Criteria of Calculation of Guarantee Limit: 1/2 of the sales for the past 1 year (recent 6 months or 3 months are also acceptable) minus amount of guarantee issued already.