Daejeon City Provides Special Guarantee for Small Business Owners' Low-Interest Debt Refinancing Loans

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Daejeon City announced on the 14th that it will implement the ‘2023 Low-Interest Rate Refinancing Special Guarantee’ for local small business owners.

The special guarantee is a type of project aimed at reducing the interest burden on small business owners. The core of the project is to help small business owners struggling with high interest rates reduce their interest burden through refinancing loans.

This year, the special guarantee will support two types: low-interest conversion guarantees and new guarantees for youth startups, with an annual scale of 165 billion KRW, including 100 billion KRW in the first half and 65 billion KRW in the second half.

The guarantee limit is up to 50 million KRW per business (full guarantee), the guarantee period is 5 years, and the loan repayment terms are a 2-year grace period followed by 3 years of equal principal repayments.

The city plans to minimize the burden on small business owners by supporting 3% of the annual loan interest and 1% of the annual credit guarantee fee for 2 years, exempting prepayment fees for the special guarantee, and significantly relaxing the loan guarantee screening criteria.

The special guarantee is available to local small business owners currently using loans guaranteed by the Daejeon Credit Guarantee Foundation without interest subsidy benefits, and youth entrepreneurs under the age of 39 with less than 3 years of business experience as of the guarantee application date.

However, those who have reported business suspension or closure, or have a history of receiving low-interest refinancing special guarantee funds, are excluded from support.

The application period is from the 16th until funds are exhausted. Applications are accepted at five major commercial banks: NongHyup, Shinhan, Woori, Hana, and Kookmin Bank. Kookmin Bank will start accepting applications from January 25.

The final support decision will be made through the guarantee screening by the Daejeon Credit Guarantee Foundation and loan screening by the lending banks.

Meanwhile, last year, the city implemented projects such as small business management improvement funds, crisis overcoming special projects, and balanced growth special projects to support small business owners.

Additionally, through interest subsidy and guarantee fee support, small business owners saved 16.7 billion KRW in financial costs.

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