Kim Byeongnae, Nam-gu Mayor, "Support for Small Business Special Guarantee Interest Rate Raised from 2% to 3%"

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Kim Byeong-nae, Mayor of Nam-gu, Gwangju Metropolitan City, announced on the 12th, "To improve the business environment for small business owners, we will raise the interest rate differential compensation rate for special guarantee loans from 2% to 3% annually."

With the interest differential subsidy increasing by 1% annually, it is expected that small business owners in the district will see a corresponding reduction in interest differences when obtaining special guarantee loans from financial institutions starting this month, significantly easing the burden of securing operating funds.

Mayor Kim Byeong-nae, anticipating the prolonged COVID-19 crisis, has been preparing the "Partial Amendment to the Ordinance on Support for Small Business Owners in Nam-gu, Gwangju Metropolitan City," which focuses on raising the interest differential compensation rate for special guarantee loan interest since the second half of last year.

This was to enable small business owners in the district to concentrate on their business activities in a stable environment.

The ordinance passed the review and resolution of the Nam-gu Council at the end of last year and will be fully applied according to the revised content starting this month.

Accordingly, small business owners in Nam-gu can receive an interest differential subsidy benefit of 3% annually when using special guarantee loans from financial institutions starting this month.

However, those who close or suspend their business or relocate their business outside the district during the interest differential compensation support period will be excluded from the support.

Mayor Kim Byeong-nae expects that with the increased interest differential subsidy, small business owners in the district will be able to use operating funds at very low costs through financial institutions.

Currently, financial institutions apply differentiated interest rates based on the individual credit rating of small business owners within a maximum limit of 20 million KRW, with the average interest rate generally understood to be around 3.3%.

Therefore, if a small business owner in the district borrows 20 million KRW through a special guarantee, they can receive a subsidy of 600,000 KRW out of the 660,000 KRW annual interest, resulting in an actual personal burden of about 60,000 KRW.

Mayor Kim Byeong-nae said, "Through active support policies, we will do our best to help small business owners in the district overcome the COVID-19 crisis and focus on their business activities in a stable environment."

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