'Trade Adjustment Fund' for FTA-Affected Companies... "Overcoming Crisis and Rebound"
Small and Medium Business Corporation
Policy Fund Loans and Consulting
[Asia Economy Reporter Kim Daeseop] #Workwear manufacturing company A. With the enactment of the Korea-ASEAN Free Trade Agreement (FTA), low-priced workwear began to be imported in earnest, causing the company's sales in the first half of 2018 to decrease by approximately 14.9% compared to the same period the previous year. Company A confirmed damages caused by the FTA and received 140 million KRW in trade adjustment funds from the Small and Medium Business Corporation. Based on this, they were able to gradually recover market share through quality improvements. In 2019, sales increased by 226.3% compared to the previous year.
The Small and Medium Business Corporation announced on the 20th that it operates the "Trade Adjustment Support Project" to provide policy fund loans and consulting to small and medium enterprises that have suffered or are certain to suffer damages due to increased imports following FTA implementation, helping them regain competitiveness.
This project supports companies confirmed to have suffered damages due to increased domestic inflow of imported items from FTA partner countries, among manufacturing or service businesses with more than two years of operation as trade-damaged companies.
Trade adjustment support funds are provided at a fixed interest rate of 2.0%. The loan period is up to 10 years (5 years grace period) for facility funds and up to 6 years (3 years grace period) for working capital. The loan limit is up to 6 billion KRW per company, with an annual working capital limit of up to 500 million KRW.
Additionally, damaged companies can receive support covering 80% of consulting costs necessary for competitiveness enhancement, such as manpower, technology, sales channels, and location information, up to a maximum of 120 million KRW.
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Kim Hakdo, Director of the Small and Medium Business Corporation, stated, "This year, we have supported 3.7 billion KRW in trade adjustment funds to 37 small and medium enterprises and plan to provide an additional 6 billion KRW by the end of the year. The Corporation will promptly support trade adjustment funds for trade-damaged companies and expand consulting support to strengthen competitiveness, helping small and medium enterprises overcome crises and achieve successful re-leaps."
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