The business owner collected wood bundles from his collapsed factory in the Nankang Industrial District (
Like the many thousands left homeless after the Sept. 21 quake, the machines had also been given temporary quarter under a tent nearby.
The factory owner and his three employees needed to return to their livelihood as soon as possi-ble, so partial production resumed within a week following the quake.
"If we just sat around waiting for government's help, we were doomed to close," the businessman said. "We had to resume production as soon as possible, or we would face not only fixed capital losses but also a loss in orders."
But now, after the furniture factory owner and many others like him have put their businesses back on-line, the government has stepped in with help in the form of an NT$50 billion loan fund. And although many small business owners have consoled themselves with the thought that late is better than never, they don't pin their hopes on the plan.
The reason: many business owners say banks won't qualify them for the aid.
"We all want to get it, but we don't think we can get it," a shoe factory owner in Taichung County said.
Helping hard-hit firms
The furniture factory owner is just one of an estimated 200 small and medium-sized enterprise (SME) owners in the Nankang Industrial District, where businesses have been partially or entirely ruined by last month's quake.
In the Taichung and Nantou areas, the two most affected areas, there are roughly 152,700 SMEs, and a report released by the Ministry of Economics Affairs (MOEA) yesterday showed that 40 percent of these suffered losses totaling US$300 million.
Businesses located in Nantou's Nankang Industrial District and Taichung's Tali Industrial District (大里工業區) and Taiping Industrial District (太平工業區) were the hardest hit, where the majority of SMEs reported a loss of under US$30,000.
According to the MOEA's definitions, SMEs are companies in the manufacturing sector that have fewer than 200 employees or capitalization of less than US$1.9 million. In the service industry, they are companies that have fewer than 50 employees or profits of less than US$2.5 million a year.
SMEs account for 97 percent of Taiwan's businesses.
The Ministry of Finance (MOF) on Oct. 20 announced an NT$50 billion pool for quake reconstruction loan aid to help SMEs. Nearly 30 banks agreed to participate.
Applicants may apply for a loan with a 3 percent interest rate and borrow up to 80 percent of their total reconstruction expenses, with a cap set at NT$60 million.
But while the terms sound attractive and practical, many owners of SMEs, though grateful, were not too hopeful.
"The problem we are facing now is that our old loans have yet to be paid off," said Laio Kuan-hui (
He added: "Banks are not charity groups, nor is the government. If you were a bank, would you want to lend us money?"
Although SMEs are allowed to use rebuilt factories as collateral, Laio said some business owners are prohibited from building on their original sites because fault lines are nearby.
In addition, another reason why banks may be reluctant to lend money is because the NT$50 billion fund is merely a bridge that closes the gap between the 3 percent interest rate offered by the government and the average 8 percent rate banks normally offer.
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