Gwangju City Provides Additional Support for 3No Loans: No Collateral, No Interest, No Guarantee Fees

Emergency Fund of 50 Billion Won Supplied to Small Business Owners Facing Management Crisis

On the afternoon of the 23rd, Lee Yong-seop, Mayor of Gwangju Metropolitan City, held an online press conference in the city hall briefing room and announced the "10th Livelihood Stabilization Measures" to support small business owners struggling due to COVID-19. Photo by Gwangju Metropolitan City

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Gwangju Metropolitan City will provide 50 billion KRW of emergency management funds to small business owners and self-employed individuals who have suffered damage due to COVID-19 but lack collateral ability, through a special guarantee loan with three no-benefits: no collateral, no interest, and no guarantee fees.

This emergency management fund follows the high response from small business owners to the 'Three No Special Loan Support' first implemented domestically in March, and due to the prolonged COVID-19 situation increasing fixed costs for small business owners and worsening business conditions, an urgent additional support measure has been prepared.

On the 23rd at 2 p.m., Gwangju Mayor Lee Yong-seop announced the special guarantee loan support plan for small business owners to overcome the COVID-19 crisis as part of the 10th Livelihood Stabilization Measures at the city hall briefing room.

Gwangju Bank President Song Jong-wook and Gwangju Credit Guarantee Foundation Chairman Byun Jeong-seop attended the announcement.

The eligibility for the three no-loan includes all small business owners located in Gwangju, excluding certain industries such as entertainment, gambling, and speculative businesses. Regardless of existing guarantees, applicants can apply for funds up to 20 million KRW per business.

However, businesses that have received interest and guarantee fee support from Gwangju City through the 'COVID-19 Damage Small Business Special Guarantee' in the first half of the year can apply for additional loans within a total limit of 50 million KRW, including the first half loan amount.

The loan conditions allow borrowing without collateral through the guarantee of the Gwangju Credit Guarantee Foundation, supplied by Gwangju Bank with a 2-year lump-sum repayment and a 5-year extension option. The loan interest rate is 2.7%, and the guarantee fee is 0.7%.

To alleviate the financial burden on small business owners, Gwangju City will cover the guarantee fees and loan interest for one year. After one year, the borrower will bear the costs. Considering the difficult economic situation, the interest rate has been minimized, and there is no prepayment penalty even if repaid before maturity.

Small business owners and self-employed individuals wishing to apply for the 'COVID-19 Crisis Overcoming Small Business Special Guarantee' can consult and apply from the 30th via the Gwangju Credit Guarantee Foundation website or consultation center, or at any branch of Gwangju Bank.

Mayor Lee Yong-seop said, "The COVID-19 situation in South Korea is very serious, to the extent that special year-end and New Year quarantine reinforcement measures are being implemented," and added, "As high-intensity social distancing measures continue, the pain and damage to small business owners and self-employed individuals are increasing."

He continued, "To ease the difficulties of small business owners, who are an important pillar supporting the local economy, even a little, we have prepared the three no-loan support plan," and added, "Gwangju City will continue to closely monitor the livelihood economic situation and seek various measures to reduce the burden on small business owners, continuously preparing practical support policies that can help."

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