4.1 Trillion KRW in Small Business Support Fund to Be Paid Starting Next Month on the 11th

Support for Small Business Owners Facing Sales Decline Due to Government Quarantine Measures Including Gathering Bans and Business Restrictions
Low-Interest Loans for Rent Burden Relief Targeted at Businesses Subject to Gathering Bans

[Asia Economy Reporter Kim Cheol-hyun] The Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced on the 29th that it plans to promptly provide 4.1 trillion KRW in support funds for small business owners starting January 11 next year to alleviate the increasing management difficulties faced by small business owners due to the third wave of the novel coronavirus infection (COVID-19). The support plan for small business owners, including the support funds, was announced on the same day as part of the 24th Emergency Economic Central Disaster and Safety Countermeasures Headquarters meeting's "Customized Damage Support Measures in Response to the Spread of COVID-19."

◆ Small Business Owner Support Funds = According to the Ministry, small business owners subject to government quarantine measures who are either prohibited from gathering or restricted in business operations will receive 3 million KRW and 2 million KRW respectively as support funds. Small business owners with annual sales of 400 million KRW or less who have experienced a decrease in sales will receive 1 million KRW. Compared to the Small Business Owner New Hope Fund, an additional 1 million KRW and 500,000 KRW in cash will be provided to businesses prohibited from gathering and those with restricted operations respectively, aiming to ease management burdens such as rent due to cooperation with strengthened quarantine measures.

The Ministry is collaborating with the National Tax Service, Ministry of Education, Ministry of Culture, Sports and Tourism, and local governments to select eligible recipients so that the support funds can be disbursed as quickly as possible. Once the support recipient database (DB) is established, from the 11th of next month, small business owners who are prohibited from gathering or restricted in business operations, as well as those who have already received the New Hope Fund, will be able to receive payments immediately upon application without additional screening.

Applications and disbursement of the small business owner support funds will primarily be conducted online, considering the need for rapid payment and quarantine measures. The online application process will be simplified as much as possible, and document submission minimized to ensure that small business owners who are not familiar with mobile phones or online systems can conveniently receive support. However, to support digitally marginalized small business owners, regional on-site application counters will also be operated as minimally necessary. Detailed support criteria, text message notification schedules, application procedures, and more comprehensive plans for the support funds will be announced through a business notice on the 6th.

◆Small Business Owner Rent Loan = Low-interest loan support will also be promoted to further reduce the rent burden of small business owners who are prohibited from gathering or restricted in business operations. For 100,000 businesses prohibited from gathering, 1 trillion KRW in policy fund loans from the Small Enterprise and Market Service will be supplied at a low interest rate of 1.9%. For 300,000 businesses with restricted operations, 3 trillion KRW will be supplied through credit guarantees at interest rates ranging from 2% to 4%, with the guarantee fee of 0.9% waived in the first year and reduced to 0.6% from the second to fifth years.

Incentives to support benevolent landlords will also be strengthened. The 50% tax credit on rent reductions will be extended until June next year, and especially for landlords with comprehensive income of 100 million KRW or less, the credit rate will be increased up to 70%. Additionally, 100 billion KRW will be provided to 170,000 closed small business owners for re-startup and re-employment, and 22.2 billion KRW will be supported for 10,000 traditional market vendors and small business owners to secure non-face-to-face and online sales channels.

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