2 Trillion KRW Support with 1% Ultra-Low Interest Rate for Small Business Owners Maintaining Employment

Reduction of Loan Interest Rate to 1% for Compliance with Gathering Bans and Business Restrictions, Employment Maintenance
Fixed 1.9% Interest Loans for Low-Credit Small Business Owners Struggling to Access Private Financial Institutions

[Asia Economy Reporter Kim Jong-hwa] The Ministry of SMEs and Startups announced that starting from the 12th, it will begin accepting applications for the employment retention and low-credit small business loan support program as a tailored damage support measure in the first supplementary budget of 2021.

Employment Retention Loans, Employment-Linked Loan Support 500 Billion KRW + Youth Employment Special Fund 500 Billion KRW

The employment retention loan lowers interest rates for small business owners who maintained jobs during the COVID-19 situation by utilizing existing small business policy funds.

First, 500 billion KRW in funds will be loaned to small business owners with regular employees in industries facing management difficulties, such as those subject to gathering bans or business restrictions, whose sales have decreased by 20% or more.

If employment retention is confirmed one year after loan execution, the loan interest rate will be reduced to 1%, and additional incentives will be provided if youth jobs are created by restructuring the Youth Employment Special Fund, which offers preferential interest rates. The Youth Employment Special Fund will be processed through proxy loans by commercial banks, and if employment is maintained for one year after the loan, the initial interest rate of 1.73~2.13% will be reduced by 0.4 percentage points. Applications will be accepted in May.

1 Trillion KRW Loan Support for Low-Credit Small Business Owners

Low-credit small business owners who find it difficult to use private financial institutions will also be supported with low-interest loans. The support scale is a total of 1 trillion KRW, including 200 billion KRW increased in the first supplementary budget, and support is planned for May.

Loan conditions are 10 million KRW per business, a fixed interest rate of 1.9%, and a repayment method of 2 years grace period and 3 years installment repayment. Specific support targets and loan methods will be announced later in accordance with implementation.

Employment-Linked Loan Support Method

The employment-linked loan support program, implemented from the 12th, utilizes 500 billion KRW of small business policy funds pre-allocated in the 2021 first supplementary budget as a tailored damage support measure.

The feature of the employment-linked loan support program is that the initial loan interest rate of 2% will be reduced to 1% if employment is maintained for one year. The loan limit is 10 million KRW per business, and the loan period is 5 years with a 2-year grace period and 3-year installment repayment method.

The support targets are small business owners who have complied with gathering bans or business restrictions and are experiencing significant management difficulties such as a sales decrease of 20% or more due to COVID-19, and who had employees enrolled in health insurance as of the end of March. However, small business owners with tax arrears or overdue loans at financial institutions are excluded from support.

Loans will be processed primarily through online applications on the Small Enterprise and Market Service website (http://ols.sbiz.or.kr) from 9 a.m. on the 12th to ensure quick support and user convenience. To ease simultaneous access, applications will be accepted on a five-day rotation basis according to the last digit of the representative's resident registration number birth year.

Loans for individual business owners will be applied for, reviewed, and contracted through the policy fund website, while corporate business owners must apply and be reviewed online and then visit the regional center to sign the written contract.

More detailed information about the employment-linked loan support program can be found on the Small Enterprise and Market Service website (www.semas.or.kr), and consultations and guidance are available at the Buttress Fund Plus dedicated call center (☎1811-7500).

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