From Today, Regional Banks Also Begin Handling Second Loans for Small Business Owners

Expansion from the initial 7 major banks to Busan, Gyeongnam, Gwangju, Jeonbuk, and Jeju Banks

[Asia Economy Reporter Ki Ha-young] Starting from the 29th, five regional banks (Busan, Gyeongnam, Gwangju, Jeonbuk, and Jeju Banks) will also begin the '2nd Financial Support Loan for Small Business Owners.'

The support details will be operated in the same manner as the commercial banks that started the program last month. The loan limit is 10 million KRW per business, the loan term is 5 years (2 years grace period, 3 years installment repayment), and the interest rate ranges from 3% to 4% annually, varying depending on the credit rating.

The Korea Credit Guarantee Fund provides a 95% guarantee for the loan. The screening process is entrusted to the banks, allowing loans and guarantees to be processed simultaneously at the bank without visiting the Credit Guarantee Fund.

Those currently delinquent on national or local taxes, those with existing debt arrears, and beneficiaries of the 1st small business owner loans (commercial banks’ secondary interest subsidy, Industrial Bank of Korea’s ultra-low interest loan, Small Enterprise and Market Service’s business stabilization fund loan) are not eligible for overlapping support. Actual loan approval is determined after each bank’s loan screening, and more detailed information such as required documents for loan application can be found on each bank’s website or customer center.

The seven commercial banks (IBK, Kookmin, Shinhan, Woori, Hana, Nonghyup, and Daegu Banks) that started the 2nd small business loan program on the 18th of last month have supported about 3,600 companies with 360 billion KRW so far. With the participation of regional banks this time, the pace of financial support for small business owners affected by the novel coronavirus disease (COVID-19) is expected to accelerate significantly.

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