Promoting Small Business Management Stability... Gumi City Signs Agreement for 'New Hope Special Guarantee'

Largest Guarantee Scale in the Province 15 Billion KRW, 3% Annual Interest Subsidy for 2 Years

Limit (Up to 70 Million KRW) and Eligibility (Credit Score 879) Expanded

On the 3rd, Gumi City in Gyeongbuk signed a business agreement in the city hall situation room for the ‘2023 Gumi City Small Business New Hope Special Guarantee and Interest Subsidy Support Project.’

Gumi City Hall.

About 10 representatives and officials from Gyeongbuk Credit Guarantee Foundation, Daegu Bank, NongHyup Bank, Hana Bank, Shinhan Bank, Saemaeul Geumgo, Gumi Credit Union, and Gumi City Forestry Association attended the agreement ceremony today.

Gumi City will expand the ‘Gumi City Small Business New Hope Special Guarantee Project’ in 2023 to support small business owners who are struggling with management difficulties due to economic recession and high interest rates.

The ‘Gumi City Small Business New Hope Special Guarantee’ is a project to support small-scale small business owners who have difficulty obtaining loans. When the city provides funds to the Gyeongbuk Credit Guarantee Foundation, the foundation issues guarantees worth 10 times the contribution, and small business owners use the issued guarantees to receive loans from the contracted banks.

This year, the city secured a record-high contribution budget of 1.5 billion KRW and will issue guarantees worth 15 billion KRW through the Gyeongbuk Credit Guarantee Foundation. Additionally, the city plans to secure additional budget during supplementary budget allocation to expand the special guarantee support project to the largest scale in the province.

Notably, new implementations this year include ▲expansion of guarantee limits (from a maximum of 50 million KRW to 70 million KRW) ▲raising the credit rating eligibility (from grade 4 to grade 3) ▲maximum limit loans for business owners supporting multiple children ▲implementation of recovery guarantees for existing guarantees ▲and introduction of a loan interest rate cap (CD rate + 2.0%) to expand support targets and loan limits while introducing high-interest support policies.

Specifically, the maximum guarantee limit for the special guarantee project will be expanded from the existing 50 million KRW to 70 million KRW, and the eligible credit score range will be broadened from 839 points (credit grade 4) or below to 879 points (credit grade 3) or below to eliminate reverse discrimination against high-credit borrowers. Good price businesses and young entrepreneurs will be supported up to the maximum guarantee limit regardless of their credit score, and business owners supporting multiple children will also be preferentially supported with the maximum guarantee limit as part of population policy.

To alleviate the burden of continuing high interest rates on small business owners, a new recovery guarantee for existing guarantees will be implemented as part of the high-interest refinancing support policy. Through agreements with financial institutions, an interest rate cap limiting the additional interest rate to 2% per annum above the base rate will be applied, providing more meticulous special guarantees to support small business owners compared to the previous year.

After signing the agreement today, Gumi City will promote the Small Business New Hope Special Guarantee Project starting May 10th for small business owners located in the city. Small business owners who receive loans from contracted banks through the Gyeongbuk Credit Guarantee Foundation will have 3% annual interest on the special guarantee loan subsidized by Gumi City for two years.

Mayor Kim Jang-ho expressed gratitude to the representatives of the institutions attending the agreement ceremony today and said, “I hope that small business owners struggling with operating funds will use the expanded Gumi City Small Business New Hope Special Guarantee starting this year as an opportunity to leap forward in their businesses.” He added, “Gumi City will continue to implement various support measures so that small business owners can strengthen their self-reliance and grow.”

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