The Korea Technology Finance Corporation announced on August 31 that it signed a memorandum of understanding with Shinhan Bank on August 28 to provide financial support for business succession and mergers and acquisitions (M&A) aimed at promoting technological innovation.
This agreement addresses the challenges of business succession due to the aging of small and medium-sized enterprise (SME) leaders and aims to alleviate the financial burden on companies pursuing M&A.
The Korea Technology Finance Corporation will supply a special guarantee agreement worth ₩20 billion, funded by Shinhan Bank's special contribution of ₩1 billion. The guarantee ratio will increase from 85% to 100% for three years, and the guarantee fee will be reduced by 0.3 percentage points.
Additionally, a guarantee agreement worth ₩21.4 billion will be provided, funded by Shinhan Bank's guarantee fee support of ₩300 million.
The business succession M&A guarantee targets companies where the representative of the acquired business is over 60 years old and has managed the company for more than five years. The technology innovation M&A guarantee is available to acquiring companies pursuing M&A.
Lee Sang-chang, director of the Korea Technology Finance Corporation, stated, "We expect this agreement to prevent management gaps in SMEs due to the aging of representatives and to promote the continuous growth and innovation of technology companies." He added, "We will continue to collaborate with relevant institutions to expand support for companies pursuing M&A and strengthen the support framework for sustainable growth and smooth succession of technology companies."
* This article has been translated by AI.
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