8 out of 10 Small Business Owners Say "Legislation and Retroactive Application of Loss Compensation Needed"

83.9% "Positive on Legalizing Loss Compensation"... Also Demand for Retroactive Application
91% Say Interest-Free Loans Needed

Due to the strengthened social distancing measures amid the spread of COVID-19, the worries of self-employed business owners are deepening. On the 23rd, a rental notice was posted at a store located on Samcheong-dong street in Jongno-gu, Seoul. This area used to be bustling with foreign tourists even on weekdays, but with the global spread of COVID-19 blocking air routes, the number of foreign tourists has sharply declined. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Junhyung Lee] A survey found that 8 out of 10 small business owners believe that the legalization and retroactive application of loss compensation are necessary.

The Korea Federation of Small and Medium Business conducted a survey from the 2nd to the 25th of last month targeting 1,205 small business owners engaged in retail, accommodation, and food service industries. The results showed this response. Among the participants, 46.5% (551 people) were in 'general industries,' 44.6% (528 people) in 'restricted gathering industries,' and 8.9% (105 people) in 'prohibited gathering industries.'

83.9% of respondents showed a 'positive' reaction to the legalization of loss compensation for small business owners. 'Very positive' accounted for 64.8%, and 'somewhat positive' was 19.1%. Regarding the legalization plan for loss compensation, 83.5% responded that compensation should be retroactively applied for damages incurred so far.

The necessity of interest-free loans for small business owners was also raised. 91% of respondents answered that interest-free loans are necessary. Regarding the loan amount, 37.1% said '30 million to 50 million KRW,' 30.7% said '10 million to 30 million KRW,' and 25.5% said 'more than 50 million KRW' is needed.

Additionally, 39.3% selected 'expansion of interest-free loan policies for small business owners' as the most necessary support policy, excluding loss compensation and easing of business hour regulations. This was followed by 'implementation of stronger rent support policies such as direct rent subsidies' (29.1%) and 'reduction of direct tax rates such as VAT and income tax for affected small business owners' (22.7%).

Regarding the target recipients of the 4th disaster relief fund, 'selective payment to small business owners in industries affected by strengthened social distancing' was the most common at 38.6%. This was followed by 'selective payment first (to affected industries and small business owners), then nationwide payment' at 30.4%, and 'nationwide payment' at 28%.

Kim Imyong, Acting President of the Korea Federation of Small and Medium Business, stated, "Small business owners have high expectations for the legalization of the loss compensation plan." He added, "Since there was also a high response regarding the need to expand interest-free policy loans in this survey, we hope that policy authorities will establish appropriate measures."

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