Songpa-gu Provides 12 Billion Won Loan Support to Small and Medium Enterprises This Year

Up to 200 Million KRW per Company... Low-Interest Loans Available for Business Stability Funds (Operating Funds, Facility Funds) Usage
▲ Small and Medium Business Development Fund at 1.5% Annual Interest ▲ Cooperation Fund Supports Interest up to 2% Above SME Loan Rates

Songpa-gu (Mayor Seo Gang-seok) will implement a large-scale loan support program totaling 12 billion KRW starting in February to alleviate management difficulties and stabilize employment for small and medium-sized enterprises (SMEs) in the area facing financial difficulties.

Since 1993, the district has established and operated a separate fund to support local SMEs. In 2018, it signed a business agreement with financial institutions to expand the fund size more than threefold and secure financing channels, striving for regional economic development.

Over the past year, loans totaling 5.4 billion KRW were provided to 33 SMEs, and 100 million KRW was supported as interest subsidy funds to reduce the interest burden on companies.

This year’s loan support targets SMEs that have been registered in Songpa-gu for more than six months, have sales performance, and possess collateral capacity under bank credit regulations. Loans of up to 200 million KRW per company are available with a two-year grace period and three-year equal installment repayment.

The use of funds is strictly limited to pure business management purposes. They must be used for working capital, facility funds, technology development funds, etc., and cannot be used for private purposes such as loan repayment.

This loan support is divided into the ▲SME Development Fund and ▲Cooperation Fund, depending on the support schedule and loan interest rate. The 4 billion KRW SME Development Fund, which has been recruiting since February 1, offers low-interest loans at an annual rate of 1.5%, making it especially popular.

A district official stated, “The SME Development Fund has attracted so much interest that recruitment often ends early in the first half of the year,” adding, “Since rapid depletion is expected again this year, it is advantageous to apply in advance by judging the timing of fund needs.”

The 8 billion KRW Cooperation Fund support is scheduled to be announced in the second half of this year, where the district will support up to 2% of the interest costs incurred when companies borrow funds depending on collateral. However, loan support excludes companies that are currently repaying or have repaid the district SME Development Fund within six months from the announcement date, companies with national or local tax arrears, and industries excluded from loan support.

Collateral capacity can be checked through prior consultation at the “Woori Bank Songpa-gu Office Branch” located on the first floor of the district office main building. Applications can be submitted by visiting the Economic Promotion Division on the 8th floor of Songpa-gu Office with the required documents. For more details such as required documents and excluded industries, please check the “Notices and Announcements” on the district website.

Seo Gang-seok, Mayor of Songpa-gu, said, “We aim to provide practical help to local SMEs struggling with financing through low-interest loan support,” and added, “We will implement various corporate support measures at the district level so that SMEs and small business owners, the backbone of the local economy, can overcome this difficult period.”

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