5.The particulars for the NT$1,700 billion loan fund are set forth below
(applicants for loans from the NT$150 billion fund are also eligible for
loans from the NT$1,250 billion loan fund):
(1) Lending financial institutions: Bank of Taiwan, Land Bank of Taiwan,
Taiwan Cooperative Bank, First Commercial Bank, Hua Nan Commercial Bank,
Chang Hwa Bank, Taiwan Business Bank, Farmers Bank of China, Chiao Tung
Bank, Central Trust of China, International Commercial Bank of China,
Cathy United Bank, Chinatrust Commercial Bank, Taipei Bank, International
Bank of Taipei, Taishin Commercial Bank, Shanghai Commercial & Savings
Bank, E.Sun Commercial Bank, Chinese Bank, Bank of Kaohsiung, Taichung
Commercial Bank, Fubon Commercial Bank, Bank of Overseas Chinese, Far
Eastern International Bank, Fuhwa Bank, Bank Sinopac, Cosmos Bank,
Taiwan, Hwatai Bank, Sunny Bank, Tainan Business Bank, Enterprise Bank
of Hualine, Union Bank of Taiwan, Entie Bank, Chinfon Bank, Macoto Bank,
and Bank of Panhsin. (The total amount of the special loans extended by
financial institutions shall be increased by NT$ 4,500 billion from
October 20, 2004. Detail infomation is shown as attached table)
(2) Period for processing loans: a provisional four-year period from 20
October 2000 to 19 October 2005.
(3) Conditions for loans from the NT$1,700 billion fund:
i.Prospective borrowers: Traditional industries (defined in attachment 2).
ii.Lending rate set by financial institutions: Calculated at a floating
rate pegged to the Directorate General of Postal Remittances and Savings
banks' interest rate on two-year time savings deposits plus 1.15% to
1.65%.
iii.Types of loans:
(i) Short-term revolving loans.
(ii) Medium-term revolving loans.
(iii) Capital expense loans: to cover capital expenditures (including
capitalized repair and maintenance expenses) for the purchase of
machinery, equipment, land, and plants.
iv.Maximum loan value per applicant enterprise (enterprises whose
responsible persons are spouses shall be calculated in combination):
(i) Short and medium-term revolving loans: The cumulative loan value
per enterprise shall not exceed NT$20 million. Loans may be applied
for in several installments and processed in accordance with the
regulations of the Small and Medium Enterprise Credit Guarantee Fund
(hereinafter, the "Credit Guarantee Fund") and of the lending
financial institution.
(ii) Capital expense loans: The maximum loan value per proposal shall be
set based on the financial condition of the enterprise and shall not
exceed 80 percent of the project cost. The total maximum loan amount
per enterprise shall not exceed NT$60 million and may be applied for
in multiple installments.
(iii) An enterprise applying for the above-stated loans shall in principle
submit its applications to a single financial institution. The
financial institution shall check whether there is any duplication
in loan applications when processing a loan.
v.Maturity term to and methods of repayment:
(i) Short-term revolving loans: The maximum term of loans based on
promissory notes or letters of credit shall not exceed 180 days; that
of other categories of short-term revolving loans shall not exceed one
year.
(ii) Medium-term revolving loans: Maximum term of five years.Repayment is
in equal monthly or quarterly installments from the drawn down date as
stipulated.
However, loans based on construction project contracts shall not be
limited to the above-stated amortization method.
(iii) Capital expense loans: the term shall be set on the basis of the
time needed to complete the proposed project and the financial
condition of the applicant enterprise, and shall not exceed seven
years, with a maximum grace period of two years. However, the seven-
year restriction may be waived for capital expense loans where the
applicant enterprise provides real estate such as the plant and its
land as collateral, in which case the lending institution shall
determine the term of loan on a case-by-case basis.
(iv) Building construction industry applicants for mediumterm revolving
loans and capital expense loans may be exempt from the repayment
methods set forth in the preceding two sub-subparagraphs. Repayment
terms for such applicants shall be decided by the lending financial
institution pursuant to the lending regulations prescribed by its
head office.
vi.Terms and conditions of collateral: Collateral shall be provided in
accordance with the lending regulations of the lending financial
institution. Where there is a shortage of collateral in the case of a
small or medium-sized enterprise, the application shall be referred for
a credit guarantee in accordance with the current guarantee guidelines
and related regulations of the Credit Guarantee Fund. In the case of not
a small or mediumsized enterprise, the relevant provisions of the
Guidelines for the Extension of Loans and Credit Guarantees for Non-
Smallor-Medium-Sized Enterprises in Traditional Industries by the Small
and Medium-Sized Enterprise Credit Guarantee Fund prescribed by the
Credit Guarantee Fund shall apply.
vii.Credit guarantee ratio: The credit guarantee ratio shall not exceed 80
percent of the credit line.
(4) The lending financial institution of Special Loans shall be attentive to
the appropriateness of the borrower's fund utilization. The borrower shall
provide a letter of undertaking that the funds shall not be moved offshore.
(5) Lending institutions granting Special Loans shall faithfully abide by credit
extension regulations. The financial institution and its responsible staff
at all levels shall be exempt from administrative liability for losses that
are not incurred deliberately, through gross negligence, or through
violation of law.
(6) The Sino-American Fund, Credit Guarantee Fund, and the lending financial
institution may dispatch personnel to the borrowing enterprise to
investigate its utilization of relevant loans; the borrowing enterprise
may not refuse.
