Busan City to Provide Early Supply of 1.8 Trillion KRW Policy Funds and Support Financial Costs

Relieving Financial Difficulties of SMEs and Small Business Owners for Seolnal Holiday

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongguk Lee] Busan City is set to release 1.8 trillion KRW in city policy funds ahead of the Lunar New Year to alleviate financial difficulties faced by small and medium-sized enterprises (SMEs) and small business owners.

The city announced that starting from the 17th, it will provide a total of 1.7915 trillion KRW, including 561.5 billion KRW in SME policy funds, 930 billion KRW in small business management funds, and 300 billion KRW in SME manufacturing special loans, to ease financial difficulties for local SMEs and small business owners.

Busan City Hall.

▲ SME Policy Funds

Under SME policy funds, a total of 561.5 billion KRW will be supported, including 500 billion KRW for working (management) capital, 60 billion KRW for development and facility funds, and 1.5 billion KRW for startup special funds. Applicants can apply at 14 commercial banks after obtaining a recommendation letter from the Busan Economic Promotion Agency.

Working (management) capital loans support interest at 2% of the loan interest rate with a limit of 800 million KRW per company. Development funds have a limit of 1.5 billion KRW per company with a 3.7% interest rate, facility funds have a limit of 1.5 billion KRW per company with a 3.1% interest rate, and startup special funds have a limit of 100 million KRW with a 2.7% interest rate.

Additionally, for 1,038 SMEs with loans maturing between January and June 2023, the maturity of 253.4 billion KRW in working capital loans will be extended by six months, and during the extension period, additional interest subsidies equivalent to 1 to 1.5% will be provided.

▲ Small Business Management Funds

A total of 930 billion KRW will be provided, including 600 billion KRW for small business management stabilization funds, 200 billion KRW for the 3-No (無) Plus special funds, 100 billion KRW for Busan Moduron Plus, and 30 billion KRW for bridge guarantees.

For small business management stabilization funds, the interest subsidy rate was increased from 0.8% to 1.5% in 2023 to ease the burden on small business owners amid continued high interest rates. Especially in preparation for the Lunar New Year, 20 billion KRW in emergency funds have been secured to support up to 2% interest subsidies until the end of February.

The application process involves first obtaining a guarantee certificate from the Busan Credit Guarantee Foundation, after which loans will be sequentially processed starting with NongHyup Bank.

Last year, in response to difficulties caused by high exchange rates, high prices, and high interest rates (the "3 highs"), emergency liquidity support for crisis-hit companies, as well as continued support for 300 billion KRW in SME special guarantees for key local industries such as shipbuilding marine equipment companies and automobile parts companies, will be maintained.

Mayor Park Hyung-jun stated, “With the prolonged COVID-19 pandemic worsening the business environment and recent high interest rates causing liquidity crises, I hope that the support funds for SMEs and small business owners will help alleviate financial difficulties ahead of the Lunar New Year holiday. The year 2023 is an important year to simultaneously achieve regional economic recovery and secure economic innovation momentum, and we will spare no effort to create policies and drive change together with companies and small business owners.”

For detailed information on fund support, inquiries regarding SME policy funds can be made to the Busan Economic Promotion Agency, and inquiries about small business management funds and SME special guarantees can be directed to the Busan Credit Guarantee Foundation.

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