Banks will offer preferential loan rates and limits to small businesses that demonstrate growth, even if their existing credit scores are low. This means that businesses with a history of late payments can still qualify for loans if they show rapid growth in their sector.
According to the financial sector on August 7, the Financial Services Commission will introduce a new growth rating system for small businesses, incorporating non-financial data, starting at the end of this month.
The commission will pilot the new credit evaluation system, combining the growth rating (S rating) with the existing credit rating (CB), at seven banks: KB Kookmin, Shinhan, Hana, Woori, NongHyup, Industrial Bank of Korea, and Jeju Bank. The S rating consists of ten levels, ranging from excellent (S1, S2) to vulnerable (S10).
To achieve an S1 rating, a business must show a revenue growth rate exceeding 50% compared to the same period last year over the last two half-year periods. This absolute evaluation will also consider relative performance compared to other businesses in the same sector. Evaluation criteria will include revenue, business index, transaction data, financial cohort, small business insurance, and sustainability information, with varying weights assigned to each category.
A financial sector official stated, "This method comprehensively evaluates growth potential by comparing businesses within the same industry and area."
The introduction of the S rating aims to address the limitations of the existing CB-focused credit evaluation system. Many small businesses with rapid revenue growth have received low ratings due to past late payments or short business histories.
According to data from the Korea Credit Guarantee Fund, 52.2% of new guarantees issued to small businesses and small enterprises last year were for those with credit scores exceeding 900. When combined with those scoring between 801 and 900, this accounts for 83.2% of the total guarantees. In contrast, the share of low-credit segments, such as those scoring between 401 and 500 or below 300, was only 0.02% of the total.
The benefits of reduced financial costs have primarily concentrated on high-credit borrowers. Borrowers with credit scores between 700 and 900 saved 1.48 trillion won in financial costs through credit guarantees, while those with scores below 300 saved only 300 million won.
Starting at the end of this month, businesses that receive improved ratings due to recognized growth potential can expect favorable terms in interest rates and loan limits.
KB Kookmin Bank plans to apply the SCB to its main business loan products, such as the 'KB Fast Loan' and 'KB Together Loan,' offering interest rate benefits. Shinhan Bank will apply it to general loans for individual business owners. Hana Bank will implement it for 'Hana More SOHO Franchise Loans' and 'Success Ladder Loans,' while Woori Bank will apply it to 'Woori Business Owner Loans,' and NongHyup Bank will expand support for small business loans through 'NH Business Growth Loans.'
According to the financial sector on August 7, the Financial Services Commission will introduce a new growth rating system for small businesses, incorporating non-financial data, starting at the end of this month.
The commission will pilot the new credit evaluation system, combining the growth rating (S rating) with the existing credit rating (CB), at seven banks: KB Kookmin, Shinhan, Hana, Woori, NongHyup, Industrial Bank of Korea, and Jeju Bank. The S rating consists of ten levels, ranging from excellent (S1, S2) to vulnerable (S10).
To achieve an S1 rating, a business must show a revenue growth rate exceeding 50% compared to the same period last year over the last two half-year periods. This absolute evaluation will also consider relative performance compared to other businesses in the same sector. Evaluation criteria will include revenue, business index, transaction data, financial cohort, small business insurance, and sustainability information, with varying weights assigned to each category.
A financial sector official stated, "This method comprehensively evaluates growth potential by comparing businesses within the same industry and area."
The introduction of the S rating aims to address the limitations of the existing CB-focused credit evaluation system. Many small businesses with rapid revenue growth have received low ratings due to past late payments or short business histories.
According to data from the Korea Credit Guarantee Fund, 52.2% of new guarantees issued to small businesses and small enterprises last year were for those with credit scores exceeding 900. When combined with those scoring between 801 and 900, this accounts for 83.2% of the total guarantees. In contrast, the share of low-credit segments, such as those scoring between 401 and 500 or below 300, was only 0.02% of the total.
The benefits of reduced financial costs have primarily concentrated on high-credit borrowers. Borrowers with credit scores between 700 and 900 saved 1.48 trillion won in financial costs through credit guarantees, while those with scores below 300 saved only 300 million won.
Starting at the end of this month, businesses that receive improved ratings due to recognized growth potential can expect favorable terms in interest rates and loan limits.
KB Kookmin Bank plans to apply the SCB to its main business loan products, such as the 'KB Fast Loan' and 'KB Together Loan,' offering interest rate benefits. Shinhan Bank will apply it to general loans for individual business owners. Hana Bank will implement it for 'Hana More SOHO Franchise Loans' and 'Success Ladder Loans,' while Woori Bank will apply it to 'Woori Business Owner Loans,' and NongHyup Bank will expand support for small business loans through 'NH Business Growth Loans.'
* This article has been translated by AI.
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