In order to meet the capital requirements for small and medium enterprises, the central competent authority shall coordinate with financial institutions and credit guarantee institutions to enhance their respective functions of providing financing and guaranty to small and medium enterprises.
In order to meet the capital requirements for small and medium credit guarantee institutions, the central competent authority shall allocate budget for donation to such credit guarantee institutions for the maintenance of their guarantee capacity. Financial institutions which contract with such credit guarantee institutions shall also cooperate with the donation whereas and the central competent authority may also solicit donation from private businesses.
The total amount of donation from various financial institutions mentioned in the preceding paragraph, taking into account the actual requirements, may be adjusted upward annually until reaching 35% of the total donation amount and be determined by the central competent authority according to the safekeeping amount, overdue ratio, substitute pay off amount, credit remainder, net value, profit and loss status, and the donated amount.
The central competent authority shall actively help small and medium enterprises get the loan from banks, and report the review results of each fiscal year to the Legislative Yuan.

All banks throughout the Republic of China shall, within the scope of their respective business, elevate the ratio of financing facilities provided to small and medium enterprises and shall set up small and medium enterprises assistance center in order to enhance the provision of relevant services.

The competent authority shall coordinate various agencies to make ample budget available for providing special loans to small and medium enterprises, and instruc sponsoring banks to provide special or emergency financing facilities or to extend loans to meet with the requirements of enterprises implementing business converting projects or adapting to the change of economic situation; and to elevate, when necessary, the ceiling of such financing, loans and guaranty.

The term "special financing" used in the preceding Article shall refer to the financing provided to small and medium enterprises carrying out any of the following projects:
1.Operational project for reinforcement of competiveness;
2.Research and development, pollution control or market expansion project:;
3.Project for creation of new product(s) or upgrading the quality of product(s);
4.Factory relocation project which must be carried out so as to meet with the requirements of environment protection , urban planning, or road construction or other infrastructural projects sponsored by the government;
5.Any other special projects as approved by the competent authority

The term "emergency financing facilities " as used in Article 15 shall refer to the following financing provided to small and medium enterprises:
1.Loan provided as revolving fund in support of production and sales during the period of significant economic crisis;
2.Loan required for recovery of significant natural disaster; or
3.Other loan as required to cope with emergency events.

The term "loans to meet with the requirements of enterprises implementing business converting projects or adapting to the change economic situation " used in Article 15 shall refer to any of the following loans extended to small and medium enterprises:
1.Loan provided as revolving fund in support of production and sales during the period of economic recession;
2.Loan required for procurement of replacement or additional machinery and equipment in the course of business conversion; or
3.Loan required for procurement of automation equipment for improvement of productivity.

Funds appropriated from the small and medium enterprise development fund for participate in the loans or guaranties sponsored by financial institutions or credit guarantee institutions in accordance with the preceding three Articles; the ratio of such appropriations may be determined by the competent authority in accordance with the actual requirements.
With regard to the bad debts resulted from causes which are not attributable to the intentional act, gross negligence or malpractice of the personnel handing the relevant matters set forth in the preceding paragraph, they shall be fully indemnified from damage liabilities and exmpt from disciplinary measures, according to the provisions of item 1,Article 77 of the Audit Act.

The competent authority concerned may coordinate the financial institutions and/or credit guarantee enterprises to give priority to small and medium enterprises, which have sound management, financial and accounting systems and have paid up all taxes due, in providing financing facilities and guaranties.

Where the operation of a small or medium enterprise is affected or it has to move to another place in order to meet with the requirements of environmental protection, urban planning, or road construction or other projects sponsored by the government, the competent authority shall assist it to apply for operating revolving loan or relocation loan from financial institution, and assist it to acquire the land required for factory relocation, when it is deemed necessary.

Where a small or medium enterprise suffers great damages caused by natural disaster, the competent authority shall coordinate the financial authority for tax exemption or reduction or other remedies.

In order to prevent small and medium enterprises from involvement in domino effect resulted from the close-down of their respective related enterprises, the competent authority may coordinate and assist industrial associations to establish, either separately or jointly, mutual guaranty fund(s) for prevention of chain close-down of small and medium enterprises so as to provide credit guarantee in respect of special financing facilities for the small and medium enterprises having financial or operational difficulties in such cases.
The small and medium enterprise development fund may, when necessary, contribute to such mutual guaranty fund(s) at the initial stage upon its (their) establishment.