K Bank expands business-owner loans: commercial units and officetels accepted as collateral, with facility financing added

[Financial News] K Bank is expanding the properties it accepts as collateral for its real estate-backed loans for sole proprietors to include commercial units and officetels. Alongside working capital for business operations, it will also provide facility financing to purchase business premises, expanding its financial services for sole proprietors.
According to financial industry sources on the 14th, K Bank is expanding the eligible collateral, permitted uses of funds and eligible business sectors for its “Business Owner Real Estate-Backed Loan” for sole proprietors.
Until now, only apartments with market values listed by the Korea Real Estate Board (KREB) were accepted as collateral. Going forward, eligibility will expand to multi-unit housing whose market values can be verified through KREB, KB Real Estate or an automated valuation model (AVM). Commercial real estate, including sectional commercial units (individual units in commercial buildings) and officetels whose values can be verified using an AVM, will also newly qualify as collateral.
K Bank is also introducing facility loans. All facility loans previously taken out from other banks can be refinanced, while new facility loans can be used to purchase business premises. The maximum facility loan is 1 billion won. The repayment term is up to 20 years for new facility loans and up to 15 years for refinancing existing facility loans. For both new loans and refinanced loans, borrowers can choose a grace period of up to three years.
The range of eligible business sectors is also expanding. By adding real estate rental businesses to the eligible sectors, K Bank is broadening financing opportunities for sole proprietors who use commercial real estate. Rentals of residential buildings are excluded. Loans for rental purposes are subject to relevant criteria, including the rent-to-interest ratio (RTI).
A K Bank representative said, “We will continue to strengthen our financial services for sole proprietors, and next year we will launch loans for small and medium-sized corporations and step up our corporate finance business.”
Meanwhile, K Bank’s outstanding loans to sole proprietors stood at 3.3 trillion won at the end of the second quarter this year. That was at least double the 1.6 trillion won recorded in the same period last year. K Bank plans to broaden its financial support by expanding the types of eligible collateral and the permitted uses of funds, and to accelerate growth in its loans to sole proprietors. It is also strengthening its role in providing inclusive finance for small businesses, including by introducing a Small Business Specialized Credit Assessment (SCB) system for sole-proprietor credit loans last month.
[email protected] Lee Hyun-jung Reporter