Ministry of SMEs and Startups 4th Supplementary Budget '3.8991 Trillion Won'... 'Saehui-mang Fund' Support

COVID-19 Affected Small Business Owners
Policy Funds Distributed from the 25th

Source=Ministry of SMEs and Startups

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 23rd that the 4th supplementary budget for 2020, amounting to 3.8991 trillion KRW, was finally approved through the National Assembly plenary session review.

This 4th supplementary budget from the Ministry of SMEs and Startups is focused on supporting small business owners who suffered losses due to strengthened social distancing measures. It is allocated as follows: 3.3072 trillion KRW for the Small Business New Hope Fund, 300 billion KRW for emergency management stabilization funds for small and medium enterprises, 101.9 billion KRW for business closure re-challenge incentives, 120 billion KRW for the Korea Credit Guarantee Fund, and 70 billion KRW for the Korea Technology Finance Corporation.

First, the New Hope Fund will provide 1 million to 2 million KRW sequentially starting from the 25th to small business owners who have experienced difficulties in management due to decreased sales caused by the spread of COVID-19. Additionally, the business closure re-challenge incentive will temporarily support 200,000 small business owners who have closed their businesses by the end of December this year with 500,000 KRW each.

Customized New Hope Fund for Small Business Owners
1 million to 2 million KRW from the 25th

Notably, the Small Business New Hope Fund is the first-ever direct cash support provided to small business owners. As the first customized support for small business owners, it is meaningful as the first non-face-to-face (untact) support service that allows small business owners to receive support online without submitting supporting documents.

The New Hope Fund support targets are classified into general industries and specially affected industries. General industries include small business owners with annual sales of 400 million KRW or less in 2019 and whose average monthly sales in the first half of 2020 decreased compared to the previous year. They will receive 1 million KRW. Simplified tax payers for VAT in 2019 will receive the fund first without verifying sales decrease, but the principle is to support small business owners whose sales have decreased.

For those who started a business between January 1 and May 31 this year and have no sales from last year, they are eligible if their annualized sales from June to August this year are 400 million KRW or less and their sales in August decreased compared to the average monthly sales in June and July.

Specially affected industries include small business owners who were subject to gathering bans or business restrictions due to strengthened social distancing measures by the Central Disaster and Safety Countermeasures Headquarters after August 16 this year. Specially affected industries are supported regardless of annual sales size or sales decrease. 2 million KRW and 1.5 million KRW will be paid to gathering ban industries and business restriction industries, respectively.

However, gambling-related industries, real estate rental businesses, and professional occupations excluded from small business policy fund loans are not eligible for the New Hope Fund. Those who are temporarily closed or have closed their businesses are also not eligible.

Also, the emergency livelihood support fund from the Ministry of Health and Welfare, the emergency employment stabilization fund from the Ministry of Employment and Labor, and the New Hope Fund cannot be received simultaneously. In particular, 14 types of special employment workers under the Industrial Accident Compensation Insurance Act (such as private tutors, golf caddies, credit card solicitors, visiting teachers, freight truck owners, etc.) and freelancers are eligible for the Ministry of Employment and Labor’s emergency employment stabilization fund regardless of business registration status and cannot apply for the New Hope Fund.

The Ministry of SMEs and Startups has prepared a rapid payment procedure so that small business owners suffering from COVID-19 can receive support as much as possible before Chuseok. By integrating administrative information held by the government, 2.41 million people were selected as the first rapid payment recipients of the New Hope Fund. They will be notified via text message from the afternoon of the 23rd, and applications will be accepted from the 24th, with payments starting on the 25th.

Rapid Payment Procedure for Small Business Owners
Apply for funds through dedicated online site

The Ministry of SMEs and Startups plans to pay at least 1 million KRW of the New Hope Fund to small business owners who apply according to the guidance into their accounts under their own names. However, for specially affected industries subject to business restrictions or gathering bans, there are difficulties in making lump-sum payments because the industry and national tax codes do not match, and local governments apply business restrictions and gathering bans differently.

Among the specially affected industries, seven industries clearly distinguished by national tax codes (general restaurants, cafes, bakeries, karaoke rooms, entertainment bars, study rooms, indoor sports facilities) will have 270,000 small business owners in regions where business restrictions and gathering bans were actually enforced rapidly paid 1.5 million KRW or 2 million KRW.

Rapid payment recipients can apply for the Small Business New Hope Fund from the 24th on the dedicated online site. No separate supporting documents are required; only additional information such as business registration number and account number must be entered. However, for identity verification, small business owners must prepare a mobile phone registered under their name or a public certificate.

Source: Ministry of SMEs and Startups

To facilitate smooth applications, on the 24th only small business owners whose business registration numbers end with an even digit can apply, and on the 25th only those with odd digits can apply. From the 26th onward, applications are accepted regardless of the number.

The Ministry of SMEs and Startups plans to promptly pay small business owners in specially affected industries whose administrative information is secured but were omitted from the first payment after Chuseok. In particular, entertainment bars and colatecs, which had their support budgets reflected in this National Assembly session, will also be supported immediately after Chuseok.

If a small business owner is eligible for the New Hope Fund but was not included in the rapid payment recipients due to missing tax information or other reasons, they can receive support through the verification payment procedure.

Small business owners apply online by uploading their business registration certificate, ID, sales proof documents, and bankbook copy, and after confirming eligibility, they will receive the New Hope Fund. Verification payment applications will be conducted through the dedicated online site around mid-next month. Specific schedules will be announced after Chuseok.

To facilitate applicants, the Ministry of SMEs and Startups operates a Q&A board on the New Hope Fund homepage 24 hours a day. Application procedures can also be guided through the call center. The Ministry emphasizes that they do not ask for account passwords or one-time password (OTP) generator numbers in relation to the New Hope Fund application.

Park Young-sun, Minister of SMEs and Startups, said, "The New Hope Fund, the first cash support and customized support for small business owners, is hoped to become a new hope for small business owners struggling due to COVID-19."

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