Ministry of SMEs and Startups Provides 1.7 Trillion Won Emergency Supplementary Budget Support for Small Businesses and SMEs

COVID-19 Overcome Funds... Focus on Strengthening Economic Vitality

Source: Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 4th that it will invest an additional supplementary budget of 1.6858 trillion KRW to support small business owners and SMEs struggling due to the spread of coronavirus disease (COVID-19).

This supplementary budget plan by the Ministry of SMEs and Startups is broadly divided into loan support (1.32 trillion KRW), guarantee support (172.3 billion KRW), accounts receivable insurance (18 billion KRW), and economic vitality support (175.5 billion KRW).

First, the loan support of 1.32 trillion KRW will be implemented by categorizing it into small business management stabilization funds (920 billion KRW), emergency management stabilization funds for SMEs (300 billion KRW), and new growth foundation funds (100 billion KRW). When combined with a separate fund operation plan change of 980 billion KRW promoted on the 28th of last month, the total loan support scale reaches 2.3 trillion KRW.

Based on this supplementary budget, the Korea Credit Guarantee Fund, Korea Technology Finance Corporation, and regional credit guarantee foundations will expand guarantees worth 1.8 trillion KRW. The accounts receivable insurance supplementary budget will also increase the underwriting scale by 200 billion KRW.

The budget of 175.5 billion KRW for restoring business damage and boosting economic vitality for small business owners and SMEs will be used diversely for COVID-19 affected store support, online sales channel support, the (tentative name) "Korea Together Sale," and discounted issuance of Onnuri gift certificates.

First, hygiene safety certification, business diagnosis, and reopening events will be supported for small business stores affected by closures due to COVID-19 confirmed cases and related causes. A budget of 37.2 billion KRW is allocated to provide direct support to affected small business stores.

In particular, since the damage from COVID-19 is concentrated on offline store-centered small business owners, support for online entry will be strengthened through online shopping mall entry support (10 billion KRW) and online-to-offline (O2O) platforms (1.5 billion KRW).

After overcoming the COVID-19 crisis, the Ministry plans to hold the (tentative name) "Korea Together Sale" by region to normalize management and restore vitality for small business owners and SMEs. Support of 4.8 billion KRW is planned. Additionally, to revitalize traditional markets and shopping districts, a budget of 69 billion KRW will be allocated for a 10% discount issuance of Onnuri gift certificates (5 trillion KRW), and 21.2 billion KRW will be provided for joint marketing.

For traditional markets and shopping districts voluntarily promoting win-win cooperation such as rent reduction campaigns in response to COVID-19 damage, a safety management package worth 12 billion KRW (supporting fire prevention facility improvements, safety facility installations, etc.) will also be provided.

Especially for the Daegu and Gyeongbuk regions, where COVID-19 damage is concentrated, this supplementary budget has been organized to prioritize support. Business commercialization and research and development (R&D) costs of 19.8 billion KRW will be supported for regionally specialized companies in Daegu and Gyeongbuk.

Park Young-sun, Minister of SMEs and Startups, said, "Through this supplementary budget, we plan to actively support the resolution of management difficulties and recovery of vitality for small business owners and SMEs suffering direct business damage and economic slowdown due to the spread of COVID-19."

Meanwhile, the Ministry of SMEs and Startups' 2020 main budget is a total of 13.4 trillion KRW. Among this, the main budget scale for loan and guarantee support and accounts receivable insurance related to small business owners and SMEs is about 4.6898 trillion KRW. An additional 1.6858 trillion KRW supplementary budget for small business and SME support will be invested this time.

This content was produced with the assistance of AI translation services.