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Taipei City Government Start-up Loans for Youth Entrepreneurs

Implementation Guidelines for Taipei City Government Start-up Loans for Youth Entrepreneurs

Fu-Chan-Ye-Ke-Zi No. 10030074400 promulgated on March 7, 2011
Amended on Oct. 4, 2011 via Fu-Chan-Ye-Ke-Zi No.10034240900
Amended on Jul. 31, 2012 via Fu-Chan-Ye-Ke-Zi No.10132288503
Amended on May 1, 2013 via Fu-Chan-Ye-Ke-Zi No. 10230113100
Amended on Aug. 5, 2014 via Fu-Chan-Ye-Ke-Zi No. 10331976802
Amended on Dec. 1, 2015 via Fu-Chan-Ye-Ke-Zi No. 10432627600

  1. To assist youth entrepreneurs in Taipei City (hereafter referred to as the City) to start up their businesses, facilitate employment opportunities and activate the City's economy, Taipei City Government (hereafter referred to as the City Government) has set up these specific Guidelines.

  2. The competent authority of the Guidelines is the Department of Economic Development (hereafter referred to as the DOED), Taipei City Government.
    The capital of the Taipei City Government Start-up Loans for Youth Entrepreneurs (hereafter referred to as the Loan) shall be provided by the financial institutions undertaking the loan project.

  3. The applicants who apply for the Loan shall meet the following qualifications:
    (1) ROC nationals who are above 20 years and below 45 years, and have been registered in the City for more than one year.
    (2) Graduates of a business management program or related programs, or those who have participated in the related courses of entrepreneurial guidance sponsored by the government, for more than 20 hours in the past three years.
    (3) The engaged businesses shall meet any of the following terms:
    i. A small business not requiring business registration in accordance with Article 5 of the Business Registration Act, but having the tax registration in the City for no more than five years.
    ii. The business which has yet exceeded five years after completing its registration by law, and the registration address shall be in the City.

    The applicants mentioned above refer to the responsible persons in either sole proprietorship or partnerships, or the representatives of the companies or limited partnership companies. The graduates of the business management program or related programs mentioned above refer to those who graduated from the departments in relation to business, business management, financial management, etc., of colleges or a higher level of educational institutes, and hold graduation certificates. The related courses of entrepreneurial guidance sponsored by the government refer to the related courses of business start-up and incubation, business management and financial management organized, or entrusted by colleges or higher level educational institutes or the government, or the organizations approved by the DOED.
    The Loan shall be granted only once to each applicant.

  4. The maximum quota of the Loan is two million NT dollars, which can be used only for the purchase of plants, business sites, machines and equipment or as the business's revolving fund. The maximum quota of the Loan for those applicants who were awarded the prizes recognized by the DOED can be increased to three million NT dollars.

  5. The Loan comes in unsecured and secured loans. The maximum period of unsecured loans is five years, and the maximum grace period of the principal is three years. The maximum period of secured loans is seven years, and the maximum grace period of the principal is three years.
    Except for the grace period, the principal shall be amortized on a monthly basis.
    Those who apply for the secured loan referred to in the preceding paragraph 1 shall provide 100% collateral to secure the Loan.
    After the Loan is released, the loan undertaking financial institution may adjust the periods (including the loan and grace periods) and amortization method as required by individual cases, which shall not be subject to the provisions stipulated in the preceding paragraphs 1 and 2.
  6. The interest rate of the Loan shall be calculated by adding an annual interest rate 0.575% to the variable interest rate of the 2-year term deposit adopted by Chunghwa Post Co., Ltd.
    The interest incurred during the preceding loan period shall be fully subsidized by the DOED.

  7. For the Loan, the City Government shall allocate 60 million NT dollars to the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (hereafter referred to the Taiwan SMEG), whereas the Taiwan SMEG shall correspondingly offer 75 million NT dollars. As a result, a total of 135 million NT dollars is available for the expenditure required by the Loan to fulfill its guarantee liability (including sharing litigation fee).
    The total amount of the credit guarantee set for the Loan is 1,350 million NT dollars.
    The City Government and Taiwan SMEG may increase the amount as required by the business needs of the Loan.
    In case that the amount allocated by the City Government and Taiwan SMEG according to the preceding stipulations is insufficient in fulfilling the guarantee liability, both parties shall follow Paragraph 8 below to make up the deficiency.

  8. The expenditure required by the Loan for fulfilling the guarantee liability shall be handled in accordance with the contract between the Government and Taiwan SMEG.

  9. If required by an application case, the guarantor with sufficient financial capacity shall be provided to guarantee the Loan.

  10. The loan applicant shall follow the related regulations of the Taiwan SMEG to apply for the credit guarantee, of which the guarantee ratio shall be 95%.
    The guarantee service fee shall be calculated on the basis of 0.5% of the fixed annual fee.
    The loan applicants who have already provided sufficient guarantee may be free from applying to the Taiwan SMEG for any credit guarantee.

  11. Except for the credit guarantee service fee and required credit check fee, the loan undertaking financial institution shall not collect any extra fees from the applicant.
  12. The applicant shall submit the following documents to the DOED when applying for the Loan:
    (1) Loan application
    (2) Copy of both sides of Applicant's ID card
    (3) Business or business start-up proposal
    (4) Affidavit
    (5) Tax registration certificate, company registration certificate, business registration certificate or other supporting documents for the registrations made by law.
    (6) The comprehensive credit report issued by the Joint Credit Information Center for the applicant and his/her spouse and the business engaged by them.
    (7) The business management-related graduation certificate or the completion certificates for participation in the related courses of entrepreneurial guidance sponsored by the government.
    (8) Other necessary supporting documents requested by the DOED.
    For the report referred to in the preceding Item (6), the applicant and his/her spouse as well as the businesses engaged by them shall agree to have the loan undertaking financial institution assist in the application. However, the application fee shall be borne by the applicant.
    If the documents submitted for an application are incomplete, the DOED will notify the applicant to submit the supplementary documents within a specified period of time. In case that the applicant fails to submit the supplementary documents in due time or the documents remain incomplete after further document submission, the application will be rejected.
    In case of any misrepresentation, such as concealment, falsification or manipulation, involving the documents submitted by the applicant, the DOED may cancel or revoke the issued approval notice, and reclaim the approved loan amount as well as its interest subsidies. If the lender fails to return the loan-related amount within the notified time limit, s/he will be referred to the court by law for compulsory execution.

  13. The Loan applications shall be examined by the Review Panel for Taipei City Government Start-up Loans for Youth Entrepreneurs (hereafter referred to as the Review Panel) set up by the DOED. The Review Panel shall examine the applicant's qualifications, financial structure, capital usage, business status, business prospects, business or entrepreneurial plan, loan quota, loan period, grace period, etc. The DOED will issue an approval notice for the Loan approved through the examination.
    The applicant shall apply for the Loan to the loan undertaking financial institution within three months after the day following the day of receiving the approval notice. In case that the application is not filed in due time, the approval notice will become invalid. If this is the case, the applicant shall re-submit the application to the DOED.

  14. The Review Panel shall consist of at least nine members, and one of them shall be the concurrent convener who is the director of the DOED or the one designated by the director, while the remaining concurrent members shall be designated (appointed) by the DOED from the following personnel:
    (1) One representative each from the DOED, Department of Finance and Taipei City Office of Commerce.
    (2) One representative each from the Taiwan SMEG and Taipei Certified Public Accountant Association, two representatives from the loan undertaking financial institutions and one to three representatives from among industrial and academic experts or entrepreneurial consultants.
    The members of the Review Panel are all in a position without pay. They shall attend panel meetings in person and shall not appoint any proxy to attend the meetings on their behalf.
  15. The Review Panel shall hold a meeting once a month. However, depending on the requirements of received cases, additional meetings can be held when necessary, and related organizations shall be invited to dispatch their personnel to attend the meeting.
  16. Any resolution of a review panel meeting shall be passed by a majority of the members present at the meeting attended by more than two-thirds of the Review Panel members before execution.
  17. In case that the Review Panel members encounter any of the following situations, they shall avoid the conflict of interests and excuse themselves from the examination:
    (1) The member or his/her spouse holds a post at the business run by the applicant or is within one year after leaving the post.
    (2) The member or his/her spouse is the spouse, direct relative or collateral relative within third degree of kinship of the responsible person, founder, director, supervisor or manager of the business run by the applicant, or the shareholder holding more than 10% of the shares of the applicant's business.
    (3) The member or his/her spouse has joint venture or shares profits with the responsible person, founder, director, supervisor or manager of the business run by the applicant, or the shareholder holding more than 10% of the shares of the applicant's business.
    The information learned by Review Panel's members in the examination process shall be kept confidential.
  18. The Loan's interest subsidies shall be applied by the loan undertaking financial institution to the DOED on a monthly basis. The loan undertaking financial institution shall compile the monthly data covering the lender's monthly payment details, overdue collection, compulsory execution, etc., and submit them to the DOED for approving and allocating the interest subsidy.

  19. In case that the lender encounters any of the following situations in his/her business, s/he shall notify the DOED in writing within three days after occurrence of the fact. Upon receiving the notice, the DOED shall suspend the interest subsidy and notify the lender and loan undertaking financial institution of it. The interest to be paid after suspension of the subsidy shall be borne by the lender:
    (1) Business suspension or shut-down.
    (2) Relocation of the business site out of the City.
    (3) Change of the responsible person or legal representative.
    (4) Failure in monthly amortization of the loan principal.
    (5) As negotiated with the loan undertaking financial institution, the loan period and amortization method are adjusted after releasing the Loan.
    After the preceding situations resulting in suspension of interest subsidy disappear, the DOED shall continue to subsidize the interest according to the application filed by the lender. However, if the lender fails to notify the DOED in accordance with the regulation, the DOED may discontinue the subsidy.
    For Item (1) listed above for suspension of the interest subsidy, the DOED shall regularly check on a monthly basis. When necessary, it may conduct irregular checks.
    If the DOED finds that the lender encounters Item (1) listed above in its check, it shall suspend the interest subsidy and notify the lender and loan undertaking financial institution, and the interest subsidy shall not be continued in the future.

  20. The City Government shall stop processing the Loan applications when the total credit guarantee amount of the Loan is used up, or the overdue guarantee balance amount plus the compensatory balance amount reach one-tenth of the total credit guarantee amount.

  21. The terms for rejecting the loan applications shall be determined by the DOED.
  22. In case that the applicant and his/her business encounters any of the following situations, the loan undertaking financial institution shall suspend the loan release, and submit the case to the Review Panel for examination:
    (1) The enquiry through the Taiwan Clearing House found the applicant or his/her business has a rejected account or the number of the dishonored checks without the payment remarks reaches the level of the rejected account.
    (2) The enquiry through the Joint Credit Information Center or the credit checking process found any of the following situations: the principal of a debt is overdue and has yet to be cleared; the agreed amortization has been delayed for more than one month; the accrued interest has not been paid and is delayed for more than three months, or the credit card issuing bank compulsorily suspends the card due to the applicant's failure in clearing the credit card consumption amount in due time. However, it is not limited to the circumstance where the applicant or his/her business has already cleared the debt or credit card debt.
  23. When processing the Loan, the loan undertaking financial institution shall truly follow the loan approval operation regulations, the credit check regulations and the Guidelines.

  24. The loan undertaking financial institution shall properly retain the Loan-related data for future checks by the City Government and Taiwan SMEG.

  25. The document formats required by the Guidelines shall be determined by the DOED.

  26. Except for the loan capital, the expenditure required by the Guidelines shall be provided from the City Government's related budgets.

  • Hit: 13573
  • Updated: 2016/2/5 14:22
  • Reviewed: 2016/2/5 14:22

  • Source: Department of Economic Development ,Taipei City Government