[Q&A] "Reducing Loan Interest Burden for Small Business Owners"... Who Qualifies and What Is the Budget?

Ministry of SMEs and Startups to Launch 'Small Business Debt Restructuring Loan' from 29th
Program to Continue Until 200 Billion KRW is Exhausted... Support for About 10,000 People
Corporate Businesses Can Apply at Shinhan Bank from September 1st

Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Bo-kyung] The Ministry of SMEs and Startups will implement the 'Small Business Debt Refinancing Loan' starting from the 29th, which converts high-interest loans of 7% or more from non-bank sectors into low-interest loans from banks.

The following is a Q&A regarding the Small Business Debt Refinancing Loan.

- Who is eligible for the refinancing loan?

▲ It is for low-credit small business owners who urgently need refinancing due to debt repayment burdens. This applies to those with a NICE (NICE) personal credit score (NCB) of 744 points or below. Small business owners with low credit who have taken out high-interest loans of 7% or more from non-bank sectors before May 31 and are faithfully repaying can apply. However, loans from private lenders are not eligible.

- What is the support budget?

▲ The refinancing loan is provided as a loan without separate guarantees and will continue until the 20 billion KRW prepared through the supplementary budget is exhausted. If an average of 20 million KRW per person is supported, about 10,000 people are expected to be assisted. From the end of September, a guaranteed refinancing loan worth 8.5 trillion KRW will be implemented through the Korea Credit Guarantee Fund under the Financial Services Commission.

- What are the support limits and conversion interest rate levels?

▲ Up to 30 million KRW per company will be supported. Applications can be made within the limit regardless of the number of refinancing loan cases. For example, if the total of three non-bank loans over 7% interest (20 million KRW, 6 million KRW, 4 million KRW) is within 30 million KRW, all can be applied for. The interest rate will be applied differentially within the range of 5.5% to 7.0% depending on creditworthiness.

- How to apply for the refinancing loan?

▲ From the 29th, applicants can obtain the 'Small Business Debt Refinancing Loan Eligibility Certificate' online on the Small Business Policy Fund website, then visit one of the 1,274 branches nationwide of Shinhan Bank or Hana Bank, which have signed agreements, to apply.

- Can corporate businesses receive refinancing loans?

▲ Corporate businesses require more documents than individual businesses, so applications will be accepted through Shinhan Bank starting from September 1 after system development.

- Can co-representative businesses each receive support?

▲ Among co-representatives, one person can be designated to receive support within 30 million KRW.

- Can the initially selected handling bank be changed?

▲ After the certificate is issued, the handling bank (Shinhan Bank, Hana Bank) cannot be changed. Applicants should carefully decide the handling bank when applying for the certificate.

- If using direct (agency) loans from the Small Enterprise and Market Service, can one apply for refinancing loans?

▲ Regardless of whether direct or agency loans from the Service are used, support will be provided up to 30 million KRW corresponding to the amount of refinancing target loans.

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