Sogongyeon: "Most Small Business Sites Are Leased... Requesting Direct Government Support"

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[Asia Economy Reporter Moon Hyewon] Half of small business owners expressed a desire for ‘direct government support for rent.’

According to the ‘Small Business Rent Status Survey’ released by the Korea Federation of Small and Medium Business on the 5th, among 1,311 small business owners nationwide engaged in wholesale and retail, food service, and personal services, 48.1% identified ‘direct government support for rent’ as the solution to the rent burden caused by the COVID-19 pandemic.

Additionally, ‘activation of the Good Landlord Movement through tax support measures for landlords’ accounted for 14.1%, and ‘rent reduction for small business tenants in stores owned by the government, local governments, and public institutions’ was 13.3%.

The survey was conducted online over six days from the 29th of last month to the 3rd of this month to empirically investigate the rent burden issues faced by small business owners due to the COVID-19 crisis.

Regarding ownership of business premises operated by small business owners, 95.6% were ‘rented.’ The level of monthly rent burden was very high, with 89.4% responding ‘burdensome’ (very burdensome or somewhat burdensome).

When asked about the monthly rent level for one business location, ‘under 1 million KRW’ was the highest at 32.5%, followed by ‘under 500,000 KRW’ at 22.9%, and ‘under 1.5 million KRW’ at 16.9%. Overall, 72.3% of respondents reported monthly rent levels ‘under 1.5 million KRW.’

Regarding rent increase levels compared to the same month last year (October), ‘no change’ was the highest at 80.8%. The Federation interpreted this as “small business owners, who were directly hit by COVID-19, have not seen significant changes in rent compared to last year, but still feel a heavy burden from rent.”

When asked about the proportion of rent in business operating expenses, ‘10% to 20%’ was the highest at 24.6%, followed by ‘20% to 30%’ at 22.9%. Additionally, 16.1% of respondents said rent accounted for more than 50% of their operating expenses.

Kim Imyong, Acting President of the Korea Federation of Small and Medium Business, stated, “The vast majority of small business owners are tenants, and 89.4% feel burdened by their current rent. Since 48.1% of small business owners most desire ‘direct government support for rent,’ it is a critical time for the government and local governments to prepare related policies.”

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