Support for Small Business Owners with Integrated 'Closure-Rechallenge' Package

Small Business and Self-Employed Policy Announcement
Focus on Short-Term 'Support' and Long-Term 'Development'

Gathering Information Dispersed Across Multiple Agencies
Support for Demolition Costs, Psychological Healing, and Consultation
58 Trillion Won Supplied for New and Refinancing Funds
Expansion of Ultra-Low Interest Loan Limits

[Asia Economy Reporter Donghyun Choi] The Ministry of SMEs and Startups announced on the 25th the "New Government Policy Directions for Small Business Owners and Self-Employed," emphasizing "support" in the short term and "nurturing" in the mid-to-long term. The goal is to expand closure and loan support for small business owners affected by COVID-19 and other factors, while focusing on nurturing smart and digital-based small business owners as a new growth engine for our economy.

First, the government will activate an "Emergency Response Plan" to address the shocks from COVID-19 and the three highs (high inflation, high interest rates, high exchange rates) as a short-term measure. By October, it plans to integrate the dispersed support for "business closure - debt adjustment - re-challenge" among related agencies into a comprehensive package. Information related to small business owners, which has been scattered across the Ministry of SMEs and Startups, the National Tax Service, Statistics Korea, and card franchise operators, will be consolidated and used to expand support for closure removal costs, psychological healing and consulting, and legal advice. Additionally, after the expiration of the extension and repayment deferral measures for small business loans at the end of September, a "New Start Fund for Small Business Owners and Self-Employed" worth 30 trillion won will be implemented to support a smooth transition.

The government will also ease management burdens through low-interest loans. By the end of this year, approximately 58 trillion won in new and refinancing funds will be supplied to improve existing loans. Of this budget, 8.7 trillion won will be used for refinancing to convert high-interest loans into low-interest ones, and 49 trillion won in new funds will be utilized for restoring normal business operations or re-startup demands. Furthermore, the ultra-low interest loan limit will be expanded from the existing 10 million won to around 20 to 30 million won. The Hope Plus credit loan support target will also be expanded from the previous recipients of quarantine support funds to recipients of either quarantine support funds or loss compensation funds.

Efforts will be made to build a robust social safety net. Starting next year, through expanding subscribers to the Small Enterprise and Small Business Mutual Aid (Yellow Umbrella Mutual Aid) and strengthening welfare support, opportunities for livelihood stability against management risks will be provided.

More than five large-scale consumption festivals will be held annually. Consumption events, which have mainly been held non-face-to-face, will be converted to face-to-face to spread a nationwide consumption atmosphere. Support for management innovation of small business owners based on smart and digital technologies will also be provided. From next year, a "National Commercial District Big Data Platform" will be established to big-data-ize dispersed commercial district information such as real-time sales. Additionally, a roadmap for the introduction of smart technologies for small business owners will be presented, and strategic planning will be supported through matching "small business owners - digital planners."

In the mid-to-long term, the plan is to nurture small business owners and local commercial districts equipped with entrepreneurship and competitiveness. As part of this, the Small Business Act will be revised next year to unify the criteria for small business owners with those for small enterprises.

Moreover, promotion of promising small business scale-up, local branding, and alley industry development will be pursued. Next year, through the revision of the Commercial District Act, a commercial district planner system will be newly established to promote commercial district development by planning the reorganization of alley commercial district spaces and nurturing small business owners. Won Young-jun, Director of Small Business Policy at the Ministry of SMEs and Startups, stated, "We plan to operate various small business nurturing programs such as commercial district innovation at the eup, myeon, and dong levels, advancement of local commercial distribution systems, and establishment of regional small business nurturing institutions," adding, "We will spare no policy support to create happy local commercial districts through private collaboration."

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