Special Loans for Gathering Restrictions Available Without Support Fund Confirmation Starting Today

Demand Explodes for Small Business Financial Support Program from 18th to 25th
21,729 Applications (420.8 Billion KRW) Received for 2nd Small Business Financial Support Program
20,648 Applications (206.3 Billion KRW) Received for Special Group Restriction Loans

[Asia Economy Reporter Park Sun-mi] From today, even before receiving the Support Fund, small business owners subject to gathering restrictions can apply for special loans using a confirmation of compliance with the gathering restriction measures.

On the 28th, the Financial Services Commission announced that from this day, small business tenants under gathering restrictions can apply for special loans at 12 commercial and regional banks by submitting a confirmation of compliance with the gathering restriction measures. Following the issuance of the 'Social Distancing Quarantine Measure Administrative Order Compliance Confirmation' by local governments and education support offices to gathering-restricted businesses starting on the 25th, from this day small business owners under gathering restrictions can apply for special loans with the ‘confirmation of compliance,’ and after additional eligibility verification, they can receive loans up to 10 million KRW.

The government and banking sector revamped the second financial support program for small business owners on the 18th, lowering guarantee fees and interest rates from the previous 2-4% range to 2-3%, and allowing small business tenants in gathering-restricted industries to receive additional loans up to 10 million KRW. However, on the ground, some small business owners under gathering restrictions expressed dissatisfaction due to difficulties in applying for special loans. To apply for the special loan for gathering-restricted industries, a confirmation of receipt of the Support Fund (2 million KRW) was required, but small business owners who had not yet received the Support Fund were unable to apply for the special loan despite needing funds.

Accordingly, the financial authorities decided to expand and supplement the application methods. Small business owners who have already received the Support Fund can apply for special loans by issuing the confirmation of receipt as before, and small business owners under gathering restrictions who have not yet received the Support Fund can now apply by obtaining a confirmation of compliance issued by local governments, as the system has been improved.

Meanwhile, the revamped and newly established second financial support program for small business owners is experiencing explosive demand. From the 18th to the 25th, the first week after the program revision, which included a maximum interest rate reduction of up to 2 percentage points on the 18th, a total of 21,729 applications (420.8 billion KRW) were received, and loans worth 195 billion KRW were executed. Compared to the period from the 11th to the 15th, the number of applications increased 6.7 times (3,243 → 21,729), and the loan amount increased 3.5 times (55.8 billion KRW → 195 billion KRW), reflecting the significantly increased demand after the revision. For the newly established special loans for gathering-restricted businesses, a total of 20,648 applications (206.3 billion KRW) were received from the 18th to the 25th, with an additional 72.7 billion KRW in funds provided.

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