Seoul City Provides Two-Track Emergency Support of 'Financial Loans + Sales Increase' to Itaewon Small Business Owners

Announcement of 'Itaewon Small Business Emergency Support Plan'... Immediate Implementation for Rapid Crisis Recovery
100 Billion Won 'Itaewon Commercial Area Recovery Fund' Provided... 2% Low Interest, Up to 30 Million Won Loan
70 Billion Won Support for Gift Certificate Usage Activation Project to Help Small Businesses Increase Actual Sales

On the 17th, memorial messages and flowers were placed at the Itaewon disaster site in Yongsan-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Lim Cheol-young] On the 24th, Seoul City announced that it will provide emergency support by lending up to 3 billion KRW per business at a fixed annual interest rate of 2.0% to small business owners and SMEs in the Itaewon area who are struggling with decreased sales following the Itaewon tragedy.

According to Seoul City, sales of small business owners in the Itaewon area have decreased by more than 60% as of the second week of November compared to before the tragedy. The city plans to help overcome the crisis quickly and restore daily life through a two-track support strategy, including emergency fund loans and measures to revitalize sales. The core of this Itaewon small business support is ▲support for SME development funds ▲promotion of gift certificate usage to increase sales.

First, a 10 billion KRW fund called the ‘Itaewon Commercial District Recovery Fund (tentative name)’ will be immediately supplied to small business owners and SMEs operating storefront businesses in the Itaewon area (Itaewon 1 and 2-dong). Loans will be provided at a maximum of 30 million KRW per business with a low fixed interest rate of 2.0% per annum, with a one-year grace period and four years of equal installment repayment. However, businesses in restricted sectors such as entertainment, gambling, nightlife, and speculation are excluded from support.

Additionally, to expedite disbursement, the guarantee screening criteria have been relaxed, including preferential limits up to 30 million KRW. Applications can be made at banks near Itaewon to increase convenience for small business owners. Applications for the ‘Itaewon Commercial District Recovery Fund’ can be submitted from the 28th of this month to the 14th of next month at Shinhan Bank Itaewon Branch, IBK Itaewon Branch, Hana Bank Itaewon Branch, Woori Bank Hannam-dong Financial Center, and Seoul Credit Guarantee Foundation Yongsan Branch.

Applications received will be reviewed, and priority support will be given to SMEs and small business owners operating storefront businesses in Itaewon 1-dong. The funds will be sequentially disbursed to the selected small business owners by the 28th of next month. Furthermore, Seoul City will also provide 7 billion KRW in project expenses to promote the use of the Yongsan Love Gift Certificates, which will help increase actual sales for small business owners in the Itaewon area.

Moreover, along with the two-track support plan, Seoul City will actively propose to the government and others the establishment of a legal basis for direct support to small business owners. Although there are legal grounds for support related to disasters and COVID-19 damages, the meaning of damage is ambiguous, making direct support for Itaewon merchants affected by this tragedy difficult.

Seoul City plans to actively urge the National Assembly to expedite the passage of the currently proposed amendment to the ‘Small Business Act’ and will also immediately propose to the Council of Mayors and the Ministry of the Interior and Safety to amend the ‘Enforcement Decree of the Framework Act on the Management of Disasters and Safety,’ which is currently limited to economic difficulties caused by COVID-19.

Han Young-hee, Seoul City’s Director of Labor, Fairness, and Coexistence Policy, said, “We will help small business owners in the Itaewon area who are suffering material and psychological damage after the Itaewon tragedy to quickly overcome the crisis through emergency support,” adding, “We will also prepare effective support measures through continuous consultations with the government and Yongsan-gu and proceed with prompt implementation.”

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