Yongsan-gu Supports Loans for Small Businesses Affected by COVID-19

Published 30 Jan.2020 07:12(KST)

Loan Support for 8 Billion KRW Small and Medium Enterprise Development Fund... First Half Loan Applications Accepted from Feb 3 to Mar 6... Up to 150 Million KRW for SMEs, 50 Million KRW for Small Business Owners... Annual Interest Rate 1.5%

Yongsan-gu Supports Loans for Small Businesses Affected by COVID-19

[Asia Economy Reporter Jong-il Park] Yongsan-gu (District Mayor Seong Chang-hyun) is launching a support program for development fund loans to assist small and medium-sized enterprises (SMEs) and small business owners in the area who are struggling due to the economic downturn and the spread of the novel coronavirus.

This year, the fund allocation amount is 8 billion KRW, which is a 25% increase compared to last year (6 billion KRW). The funds will be disbursed in two installments of 4 billion KRW each in the first and second halves of the year.

The loan application period for the first half is from February 3 to March 6.

The loan limit is up to 150 million KRW for SMEs and up to 50 million KRW for small business owners. The funds can be used for business operations, technology development, facility expenses, and other purposes. The interest rate is 1.5% per annum, with a 2-year grace period followed by 3 years of equal repayments.

Eligible applicants are SMEs and small business owners operating within the district. Excluded are businesses in finance, insurance, lodging, bars, precious metals, restaurants larger than 330㎡, gambling, luxury, entertainment, and speculative industries.

Applicants should bring ▲fund loan application form ▲business plan ▲financial statements for the past three years or VAT taxable standard confirmation ▲copy of business registration certificate and documents related to additional points ▲and documents requested by banks and credit guarantee foundations to the Shinhan Bank Yongsan-gu Office branch (one-stop service counter, ☎793-3805, 749-2586).

Forms can be downloaded from the district website (www.yongsan.go.kr) under the announcements/notices section.

The district will conduct evaluations according to regulations and prioritize support in the following order: new applicants for the SME development fund (priority 1), companies that have borrowed once or more than three years ago and have completed repayment (priority 2), and companies currently repaying loans (priority 3). Women entrepreneurs, disabled business owners, and companies excelling in job creation within the district will also receive priority support.

Selected companies will apply for loans and receive funds around mid-April.

The district’s SME development fund was first established in 1993. The total fund amount is 20.2 billion KRW. Earlier this year, 7 billion KRW was added, a 53% increase compared to last year (13.2 billion KRW). As of January, 305 companies (11.2 billion KRW) are currently receiving loans, and a total of 792 companies (59.1 billion KRW) have benefited so far.

The district also operates a year-round loan program for young entrepreneurs aged 39 and under, with a fund size of 2 billion KRW. The support conditions are an annual interest rate of 1.2%, a 1-year grace period, and 4 years of equal installment repayments, with a loan limit of up to 100 million KRW per applicant. The funds can be used for business stabilization, facility expenses, and rental deposits.

Seong Chang-hyun, Mayor of Yongsan-gu, said, “Small and medium-sized enterprises, small business owners, and young entrepreneurs are facing a crisis due to the spread of the novel coronavirus. The district will provide prompt support.”