90% of Small Business Owners "Struggling with Loan Interest"... Revenues Drop, Drowning in Debt

Sogongyeon Announces 'Financial Status Survey'
40% Report Decline in Both Sales and Profits
"Comprehensive Financial Measures Needed"

[Image source=Yonhap News]

According to a survey, 9 out of 10 small business owners are struggling with the burden of loan interest. About 40% of small business owners reported that both sales and profits have declined, leading to an increase in debt compared to last year.

The Korea Federation of Small and Medium Business conducted a financial status survey of 1,430 small business owners from the 9th to the 14th. The cost that small business owners felt most burdened by while running their businesses was financial costs such as loan principal and interest (52.2%).

Additionally, 89.7% of respondents answered that they are currently struggling due to the burden of loan interest. Among them, 55% said they are "very struggling," and 34.7% said it is "somewhat difficult."

64.3% of respondents said their loan balance (debt amount) has increased compared to a year ago. 25.8% said it is about the same as the previous year, and 10.8% said it has decreased.

When asked why their debt amount increased, 41% responded "decline in both sales and profits." This was followed by "sales decline (37%)," "profit decline due to rising costs (16%)," and "debt increase due to asset acquisition (4.1%)."

Regarding the biggest difficulties related to loans, 39.8% of respondents answered "increased interest burden due to interest rate hikes," followed by 36.2% who said "unable to take additional loans due to loan limit restrictions."

As for the financial support policies most needed by small business owners, 47.8% of respondents chose "implementation of policy fund loans for small business owners." Next were "unlimited expansion of refinancing loans to personal loans upon proof of business operating funds (15.2%)" and "deferment of repayment and extension of maturity for existing loans (14.4%)."

Cha Nam-su, Head of Policy and Public Relations at the Korea Federation of Small and Medium Business, said, "As small business owners are enduring with loans due to a sharp deterioration in business performance caused by weakened consumer sentiment, comprehensive financial measures such as expanding direct loans for small business owners and freezing or lowering additional interest rates by financial institutions must be prepared."

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