Seongdong-gu Provides Additional 5 Billion Won Loan Support for Small Businesses and Small Merchants Affected by COVID-19

Interest support at 1.7% for the first year, provided in three phases from the 25th until funds are exhausted

[Asia Economy Reporter Park Jong-il] Seongdong-gu (Mayor Jung Won-oh) is providing an additional KRW 5 billion loan support following the loan support from the Small and Medium Enterprise Development Fund in the first half of February to stabilize the management and minimize the damage of small businesses and small merchants due to the prolonged COVID-19 pandemic.

To this end, the district has newly allocated KRW 2.2 billion for emergency support related to COVID-19 in addition to the KRW 6.5 billion budgeted this year for the existing Small and Medium Enterprise Development Fund loan support.

Accordingly, following the KRW 3.7 billion support in February, a total of KRW 5 billion will be additionally provided from May, making the total support KRW 8.7 billion.

This loan support will be carried out in three rounds considering the time required for the Seoul Credit Guarantee Foundation’s special credit guarantee certificate review and issuance necessary for loan execution. The first application period starts on the 25th and will continue until the KRW 1 billion loan fund is exhausted. The second and third application periods are scheduled for the end of June and the end of August, respectively.

The loan amount limit is up to KRW 10 million per company if a special credit guarantee certificate from the Seoul Credit Guarantee Foundation is issued, and the loan interest rate is lowered from the existing 2.0% to 1.7%.

The repayment condition is a one-year grace period followed by three years of equal installment repayments, with the district covering the interest payments during the initial one-year grace period. Additionally, the guarantee issuance fee by the Credit Guarantee Foundation will also be supported for small businesses.

The support targets only small businesses and small merchants within the district who have been most severely affected by COVID-19. The business must be a sole proprietorship with at least one year of operation from the establishment date on the business registration certificate to the credit guarantee application date. Businesses that are temporarily closed or shut down, those unable to obtain loans from financial institutions (such as restricted industries), or those with a history of Small and Medium Enterprise Development Fund loans within the past four years are excluded.

Companies wishing to apply for the loan should refer to the notices section on the Seongdong-gu Office website, bring the loan application form and required documents, visit the Shinhan Bank Seongdong-gu Office branch for prior consultation regarding the issuance of the special credit guarantee certificate, and then visit the 13th floor Regional Economy Division of Seongdong-gu Office to submit the application. After the application deadline, supported companies will be selected through the operation committee’s review, and loan execution and fund receipt are expected around mid-June.

Jung Won-oh, Mayor of Seongdong-gu, said, “As the spread of COVID-19 prolongs, causing economic recession and especially more difficulties for small businesses and small merchants, we have prepared this additional loan support. I hope it will be a seed of hope that can help even a little during these difficult times.”

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