Corporate Electronic Settlement Service Loans for Buyer Loans on Accounts Receivable Overview Loan Type Loans for Buyer Eligibility Companies that need to settle payments after purchasing goods and services and those that applied for a loan. Loan Ceiling less than the amount of credit purchases Borrower Buyers Loan Rate Aggregated Credit Ceiling Base Rate + Additional rate Term 1 year after approval of the loan Term per loan Maximum of 270 days (Including extension period) Interest Payment Installment Deferred Payment ¡æ This loan applies only to those companies that satisfy the Bank of Korea's criteria. How it works A selling company supplies goods to a purchasing company under the contract reached between them. The selling company collects the sales amount through its bank by issuing a bill of exchange or a sales collection request, or applies for its payment to KEB, the paying bank within 30 days after supplying goods and services to a purchasing company. ¡æ The supplier's bank (collecting bank) and the Korea Financial Telecommunications & Clearings Institute (KFTC) will be involved in the collection of a bill of exchange. KEB submits a bill of exchange for payment to a purchaser. The purchasing company settles the bill of exchange submitted with its own capital or a loan within 7 days from the settlement date requested. KEB pays for the goods supplied to the supplier. What are benefits from 'Loans for Buyer'? 'Loans for Buyer' has offered a barrage of benefits to a buyer company that includes tax deductions and preferential bid for the procurements by the governmental institutions. The benefits from 'Loan for Buyer' are: Tax Deductions Corporate / Income tax deduction ( in case either a purchase company or supplier is a small-medium sized company ) Amount deducted : (Settlement Amount - Amount on Bill Issued) x 0.3% Ceiling of Deduction: less than 10 percent of Corporate Tax Preferential Conditions for Procurement Bid There is a better bid condition for a company, which has maintained a good credit record for 'Loans for Buyer'. A purchase company can get a preferential status in making a bid of supplies to a construction company or the governmental agencies including 'Public Procurement Service'. Cost-effective and Efficient Processes It can reduce 'operating costs' that come from 'management' such as issuing bills