'Same-Day Payment' Small Business Support Fund, 1.01 Million Applicants Received 1.4 Trillion Won on First Day of Application

Priority Support for Businesses Under Gathering Bans and Operation Restrictions, Including Rent
Identifying 260,000 More People Than Saehope Fund to Minimize 'Blind Spots'

On the 12th, Park Young-sun, Minister of SMEs and Startups, briefing on the Small Business Support Fund. Photo by Ministry of SMEs and Startups

[Asia Economy Reporter Kim Heeyoon] The Ministry of SMEs and Startups announced on the 12th that on the first day of payment for the third disaster relief fund, the Support Fund, it paid 1.4 trillion won to 1.01 million small business owners who applied for support.

According to the Ministry, from 8 a.m. to midnight on the 11th, 1.01 million small business owners with business registration numbers ending in odd digits (37% of the 2.76 million eligible for rapid payment) applied online.

Among those who applied by noon that day, 454,000 people received 670.6 billion won starting from 1:20 p.m. on the same day, and among the 554,000 who applied until midnight, 761.1 billion won was paid starting from 3 a.m. on the 12th.

On the 12th, from 6 a.m., notification messages will be sent to 1.33 million small business owners with business registration numbers ending in even digits among the 2.76 million first rapid payment recipients. Similarly, applications submitted by noon will be paid from around 2 p.m. on the 12th, and those submitted after noon until midnight will be paid from 3 a.m. on the 13th.

Small business owners who missed applying on these two days can apply online on the 13th regardless of whether their business registration number ends in an odd or even digit.

On the 11th, there were 15,367 inquiries to the call center and 46,495 inquiries via online chat regarding the Support Fund. Most inquiries were about not receiving notification messages.

The Ministry explained that the Support Fund for small business owners differs from the New Hope Fund in terms of support methods.

First, the Support Fund prioritizes support for businesses subject to gathering bans and business restrictions, which are most directly affected by the third wave of COVID-19.

Among the 2.76 million first rapid payment recipients, 880,000 (32%) are in gathering ban or business restriction sectors, which is three times the 270,000 (11%) among the 2.41 million first rapid payment recipients of the New Hope Fund. This is because, with strengthened quarantine measures due to the third COVID-19 wave, the Ministry closely cooperated with local governments, education offices, and the National Tax Service to build a database of gathering ban and business restriction recipients a month in advance.

Gathering ban and business restriction sectors receive more substantial support through rent subsidies and other measures. In addition to the common payment of 1 million won, gathering ban and business restriction sectors receive an additional 2 million won and 1 million won respectively to reduce fixed costs such as rent. These amounts are 1 million won and 500,000 won more than those of the New Hope Fund.

Also, to expedite payments, a prepayment and post-settlement method was applied to those who previously received the New Hope Fund due to decreased sales. During the New Hope Fund support, only simplified VAT taxpayers (about 800,000 people) received prepayments.

This time, to speed up support, prepayment and post-settlement will be applied to 1.881 million general business recipients of the Support Fund who previously received the New Hope Fund. For general businesses, it is necessary to verify sales decrease compared to 2019, which can only be done after March when last year's VAT return amounts can be checked.

However, considering that if VAT return results confirm increased sales last year, the amount must be reclaimed, small business owners whose annual sales increased last year are advised to refrain from applying.

The speed of fund payment has also increased. For the first three days of support, same-day application and payment of the Support Fund is possible. Unlike the New Hope Fund, which paid the day after application, the Support Fund pays in the afternoon on the same day if applied in the morning, and by the next morning if applied in the afternoon, providing faster support to small business owners in urgent need. However, from the 14th, applications submitted by 6 p.m. will be paid from 3 a.m. the next day.

Additionally, 260,000 people who were in blind spots during the New Hope Fund payment (2.5 million recipients) were newly included in the support target. The eligibility criteria were expanded to include small business owners who recently opened by delaying the maximum opening date.

While the New Hope Fund limited eligibility to small business owners who opened by May 31, three months before the Central Disaster and Safety Countermeasure Headquarters (CDSCH) measures in August last year, the Support Fund expanded this to those who opened by November 30, the same month as the CDSCH measures last year.

Also, the sales calculation base year was expanded to last year to include small business owners whose annual sales decreased to 400 million won or less due to the COVID-19 impact last year. The sales decrease reference year was improved to favor small business owners; unlike the New Hope Fund, which compared the first half of last year to 2019, the Support Fund includes those whose annual sales decreased last year compared to 2019. As a result, businesses like laundries and photo studios, which had higher sales in the first half due to seasonal factors, can also receive support.

Furthermore, unlike the New Hope Fund, the Support Fund includes small business owners subject to gathering bans and business restrictions strengthened independently by local governments.

Lee Euncheong, Director of Small Business Policy at the Ministry of SMEs and Startups, said, "Even if not included in this support target, payments will begin from the 25th for winter sports facilities and auxiliary facilities, lodging facilities, and gathering ban and business restriction businesses added by local governments."

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