Jungjingong Launches Accounts Receivable Factoring Business... Supporting Short-Term Liquidity for SMEs

Non-Recourse Accounts Receivable Factoring
Strengthening the Transaction Safety Net Between Companies

The Small and Medium Business Corporation announced on the 12th that it has started accepting applications for the ‘SME Accounts Receivable Factoring’ project, which supports short-term liquidity supply to strengthen the transaction safety net for small and medium-sized enterprises.

The SME Accounts Receivable Factoring project operated by the Corporation involves purchasing the accounts receivable of the selling company to provide funds and collecting the accounts receivable payments from the purchasing company. Factoring not only supports liquidity but also does not have a recourse claim against the selling company, preventing the risk of chain bankruptcies caused by the purchasing company’s insolvency spreading to the selling company.

Jungjingong

Eligible applicants are small and medium-sized enterprises that have financial statements for the past three fiscal years and have transaction records with the purchasing company for more than one year (at least three transactions within the past year). The eligible receivables are accounts receivable generated from supplying products, etc., by the SME, and must be electronic tax invoices issued within 62 days from the application date.

The factoring support period can be selected by the applicant in 15-day increments within 30 to 90 days, considering the payment due date.

The factoring support budget for 2025 is 59 billion KRW, and companies can apply for up to 1 billion KRW annually within one-third of the sales amount on the most recent financial statements (within half for manufacturing industries). All application procedures are conducted online, and convenience for applicants has been enhanced by simplifying the submission documents using real-time data transmission and collection technology.

Kang Seok-jin, the Director, said, “The accounts receivable factoring project is an important financial service that supports early liquidity for SMEs and enhances transaction stability,” adding, “In particular, through non-recourse accounts receivable factoring support, we expect to contribute to creating an ecosystem where SMEs can continue transactions with peace of mind.”