Songpa-gu Extends SME Loan Repayment Period by Up to 1 Year

Up to 4 Quarterly Extensions Possible Until April 2021 for 2.8 Billion KRW Project

[Asia Economy Reporter Jongil Park] Songpa-gu (Mayor Park Seong-su) is extending the repayment period of the Small and Medium Enterprise (SME) Development Fund loans by up to one year to revive the local economy, which has been weakened due to COVID-19.

The district is operating an SME Development Fund worth 4 billion KRW this year. Companies registered for more than six months in Songpa-gu can borrow operating funds at an interest rate of 1.5%.

The loan limit is up to 200 million KRW per company, and repayments are made quarterly (February, May, August, November).

With the second quarter repayment due in May, the district has taken steps to extend the repayment period of the SME Development Fund loans to help local SMEs overcome financial difficulties.

To this end, an emergency supplementary budget of 2.8 billion KRW was prepared in consultation with Woori Bank in February.

Accordingly, 119 companies currently repaying principal or whose principal repayment is due within the support period can apply for an extension. The extension period is from May this year to April 2021, up to a maximum of one year. Applications can be made for an extension of up to four repayment installments, regardless of direct or indirect damage caused by COVID-19.

Companies wishing to extend the repayment period can visit the Woori Bank Songpa-gu Office branch to submit their applications from April 20 to May 20. However, to prevent long waiting times and other issues, visits are possible only after making a prior reservation. For related inquiries, contact the Job Policy Officer at Songpa-gu Office.

In addition, the district has expanded the scope of benefits for various loan supports totaling 19.7 billion KRW prepared this year to help companies struggling with management difficulties due to COVID-19 recover their operations.

The previous quarterly application system has been changed to a rolling application system so that companies can receive funds promptly, and the interest rate has been significantly reduced from 1.9% to 1.5%. For small business owners without collateral, up to 100 million KRW is supported through special credit guarantee recommendations, and guarantee fees have been reduced by up to 50%.

The CEO of Company A, who actually received loan support from the district, said, “Last year, I started a costume rental business in Munjeong-dong and was expecting sales to increase this spring, but COVID-19 caused cancellations of weddings and first birthday parties, which created great difficulties.” He added, “In this desperate situation, receiving loan support from Songpa-gu was a breath of fresh air.”

Going forward, the district plans to inject an additional 5 billion KRW if the 19.7 billion KRW loan support fund is depleted early.

Park Seong-su, Mayor of Songpa-gu, stated, “Now is the time to focus on reviving the stagnant local economy with the attitude of a manager, along with our role as community quarantine leaders.” He added, “We will do our best to swiftly implement policies to revitalize the local economy so that local companies and residents can return to their daily lives as soon as possible.”

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