Seoul City Provides 1 Trillion Won in '4 No Worries Safe Finance' to Support Small Business Owners' Daily Recovery

Interest, Guarantee Fee, Collateral, and Paperless 4-No Loan Method, Applications Open from the 20th

[Asia Economy Reporter Lim Cheol-young] On the 19th, the Seoul Metropolitan Government announced that it will support small business owners, who are suffering from multiple hardships such as decreased sales due to the prolonged COVID-19 pandemic, rising loan interest rates, and ongoing fixed expenses, with a 1 trillion won scale of ‘4-Mu (無) Safe Finance’ again this year.

Seoul will proceed with the so-called ‘4-Mu (無) method’ this year as it did last year, which requires no ‘loan interest,’ ‘guarantee fee,’ ‘collateral,’ or ‘documents.’ Without limit screening, businesses can receive loans up to 20 million won per business, and up to 100 million won per business.

The support condition is that the first year from the loan execution date is interest-free, and from the second year, Seoul will subsidize the interest rate of 0.8%. The loan principal is to be repaid in equal installments over 4 years after a 1-year grace period.

The funds supplied this time total 1 trillion won, consisting of 900 billion won for general 4-Mu Safe Finance and 100 billion won for 4-Mu Safe Finance for medium- and low-credit small business owners. Especially this year, to prevent guarantee screening backlog, 500 billion won will be supplied in the first phase from the 20th, and the schedule for the second phase supply will be additionally announced through the Seoul Metropolitan Government and Seoul Credit Guarantee Foundation websites once the first phase is exhausted.

Seoul has also separately allocated 4-Mu Safe Finance for medium- and low-credit small business owners in the blind spots who inevitably experienced a drop in credit rating due to sales decline and could not overcome the high loan barriers of banks. The target is medium- and low-credit small business owners with a credit score of 839 points or below (formerly grade 4 or below), and the support limit is up to 20 million won per business. Other support conditions such as interest rate subsidy and exclusion criteria are the same as those of general 4-Mu Safe Finance.

The first application for ‘4-Mu Safe Finance’ starts from the 20th. Loan interest and guarantee fees are borne by Seoul, and using the Seoul Credit Guarantee Foundation guarantee certificate, it proceeds as ‘no collateral’ and without paper documents for a simple loan application.

Han Young-hee, Seoul’s Labor, Fairness, and Coexistence Policy Officer, said, “To help small business owners recover their daily lives, we plan to inject a total of 2.25 trillion won in policy funds this year, including 1 trillion won for 4-Mu Safe Finance.” She added, “In addition, we will prepare and implement various support measures so that small business owners can quickly overcome the COVID-19 crisis and normalize their operations.”

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