Songpa-gu Provides 25 Billion KRW Unsecured Loans to SMEs and Small Businesses to Overcome COVID-19 Crisis

Applications Open from April 30, Up to 20 Million KRW Interest-Free for 1 Year per Company

[Asia Economy Reporter Jongil Park] Songpa-gu (Mayor Park Seong-su) is launching an interest-free loan support project worth 25 billion KRW to assist local small and medium-sized enterprises (SMEs) and small business owners facing sales declines and management crises due to the prolonged COVID-19 pandemic.

Through this project, local small business owners will be supported with credit-guaranteed loans of up to 20 million KRW per business.

Songpa-gu, along with Woori, Shinhan, and Hana Banks, is contributing a total of 2 billion KRW and, through a business agreement with the Seoul Credit Guarantee Foundation, will operate unsecured credit-guaranteed loans totaling 25 billion KRW.

The support targets small business owners who have registered their business in Songpa-gu, have been operating for more than six months, and have a NICE personal credit score of 595 points (credit grade 7) or higher.

The loan limit is applied differentially according to the personal credit score, with a maximum of 20 million KRW per business.

For one year from the loan execution date, the district will cover the full loan interest, and any interest incurred after one year will be borne by the supported business. The guarantee fee rate (credit guarantee commission rate) has also been reduced from the existing annual 0.8~1% to 0.5% per year.

Applications can be made by visiting the designated branches of each bank in person from April 30 until funds are exhausted.

Detailed information such as required documents and application locations can be found on the Songpa-gu Office website or by contacting the district office’s Job Policy Division.

Additionally, unlike other local governments, Songpa-gu has expanded the support target to include SMEs.

For local SMEs using the loan support system, Songpa-gu will temporarily cover the full interest without a separate application in 2021. SMEs eligible for loan support are local companies with business registration for more than six months and secured by real estate, credit guarantees, or technology credit guarantees, with loans available up to 200 million KRW.

Mayor Park Seong-su stated, “Through this ‘Songpa-type Interest-Free Loan Support for SMEs and Small Business Owners’ project, we hope local businesses can overcome financial difficulties and help overcome the COVID-19 crisis.”

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