"COVID-19 Direct Loans Average 3 Days" ... 'Fast Track' Implementation

Small Business Management Stabilization Fund
Ministry of SMEs and Startups, Rapid Processing Plan for Support Funds

Source=Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 19th that it has prepared and will implement a direct loan plan for business stabilization funds to support small business owners affected by the novel coronavirus infection (COVID-19).

This direct loan plan for business stabilization funds was explained by Minister Park Young-sun of the Ministry of SMEs and Startups during the emergency economic meeting held at the Blue House on the morning of the same day. The plan is being promoted based on the judgment that a breakthrough measure to shorten the processing period is necessary amid ongoing complaints from the field due to delays in fund disbursement caused by a surge in applications for COVID-19 business stabilization funds.

The Ministry of SMEs and Startups has allocated a budget of 2.72 trillion won for the direct loan plan for small business owners' business stabilization funds. Minister Park Young-sun stated, "What small business owners and SMEs urgently need is for those who require short-term funds to be able to receive emergency business stabilization funds," adding, "We have expanded the channels with commercial banks in consultation with the Financial Services Commission."

First, high-credit small business owners with credit ratings from 1 to 3 will be served through IBK Industrial Bank of Korea's 'ultra-low interest loans,' while medium to low credit ratings from 4 to 10 will be handled by the Small Enterprise and Market Service's 'COVID-19 Business Stabilization Fund.'

Additionally, for direct loan operations, the support target will be small business owners affected with credit ratings of 4 or below. Prior guidance will be provided so that applicants can visit after direct credit verification.

The scale of direct loan support is estimated at 1.94 trillion won, excluding the already disbursed amount (400 billion won) and the scheduled amount (380 billion won) from the total budget of 2.72 trillion won. The support volume is expected to average about 11 million won per approximately 176,000 small business owners.

Minister Park emphasized, "(Regarding emergency business stabilization fund support and fund disbursement) we have distributed the process and advanced the timing of the policy," adding, "I hope both small business owners and SMEs make good use of this."

He continued, "Those with credit ratings from 1 to 3 can receive ultra-low interest emergency business stabilization funds at 1.5% interest by visiting commercial banks. Those with ratings from 4 to 6 can receive emergency business stabilization loans at 1.5% interest by visiting IBK. Those with credit ratings from 7 to 10 can receive loans from the Small Enterprise and Market Service."

The loan amount will be differentiated depending on whether the area is designated as a special disaster zone: 15 million won for special disaster zones and 10 million won for other areas. All loan restriction criteria, on-site evaluations, and limit adjustment procedures will be omitted to shorten the loan processing time (average 3 days, maximum 5 days).

Minister Park explained, "The Small Enterprise and Market Service has created a fast track to provide one-stop verification and loans for small business owners in a single visit. This applies to loans under 10 million won. The Regional Credit Guarantee Foundation conducts guarantee reviews for those wishing to borrow over 50 million won, which takes some time."

The Ministry of SMEs and Startups plans to pilot the program from the 25th after revising related guidelines and systems, and will officially implement it with commercial banks starting from the 1st of next month.

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