Seongdong-gu Expands Guarantee Support for SME Development Funds by 15 Times with 400 Million KRW Contribution

Credit Guarantee Foundation Adds 400 Million KRW to SME Growth Fund, Raises Guarantee Limit 15-Fold... 100% Loan Guarantee Possible, Guarantee Fee Reduced from 1% to 0.8% to Ease Corporate Burden

[Asia Economy Reporter Park Jong-il] Seongdong-gu (District Mayor Jung Won-oh) signed a business agreement with the Seoul Credit Guarantee Foundation on the 4th to provide credit guarantee support for small businesses and small merchants in the area by contributing to the Small and Medium Enterprise Development Fund.

This agreement was promoted to expand special guarantee support benefits for small merchants and self-employed individuals with weak collateral by additionally contributing 400 million KRW to the Credit Guarantee Foundation's Small and Medium Enterprise Development Fund.

The district contributed a total of 800 million KRW, including the existing 400 million KRW contributed until 2013 and the additional 400 million KRW this time, and expanded the loan guarantee limit, which was previously set at 10 times the contribution amount, to 15 times.

Also, the guarantee ratio, which was previously 80%, was raised to 100%, enabling credit guarantees for the entire loan amount, and the guarantee fee was lowered from 1% to 0.8%, significantly reducing the burden of loans.

A district official said, "In fact, since the beginning of this year, we have been implementing small and medium enterprise development fund loans totaling 5.2 billion KRW, but small merchants with weak collateral often could not receive sufficient loan support due to weak guarantees," adding, "This agreement is essential for the practical crisis overcoming of companies facing difficulties due to the novel coronavirus infection (COVID-19)."

The agreement includes detailed contents for efficient execution of guarantee fund contributions and special guarantee support, such as ▲payment of contribution funds ▲special guarantee limit (15 times the contribution amount) ▲guarantee targets ▲preferential support for companies ▲active provision of company data and information for special guarantees.

Earlier, through the Small and Medium Enterprise Development Fund loan project, the district has been providing interest-free loans and guarantee fee support for one year since May to small businesses and small merchants struggling due to COVID-19, supporting a total of 4.9 billion KRW for 49 companies with a maximum of 10 million KRW per company in the first round.

The second round of support, which started on the 27th of last month, raised the loan limit to 20 million KRW per company, and with this expansion of special guarantee support, it is expected that more small merchants will be able to apply for loans without the burden of collateral.

Jung Won-oh, Mayor of Seongdong-gu, said, "This agreement is a small stepping stone for Seongdong to become a city where anyone can start a business," and added, "We will strive to work with the Seoul Credit Guarantee Foundation to find ways to more actively support small businesses and small merchants struggling due to COVID-19."

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