Repayment Period for Diligent Closed Small Business Owners' Guaranteed Loans Extended to 15 Years

Long-Term Installment Repayment Guarantee Program
to Begin on September 5

The Ministry of SMEs and Startups announced on September 4 that it will implement a long-term installment repayment guarantee program for small business owners who have closed their businesses due to COVID-19, aiming to ease their repayment burden.

This special guarantee program has secured funding through the second supplementary budget. It allows former small business owners to convert their existing loans backed by regional credit guarantee foundations into loans with a repayment period of up to 15 years, along with support such as low interest rates.

The eligibility criteria include those who operated a business between April 1, 2020, and the end of June 2025, whose business is now closed, and who are currently making diligent repayments on loans backed by regional credit guarantee foundations.

Previously, the repayment period for guarantees targeting closed small business owners provided by regional credit guarantee foundations could be extended for up to seven years. With the introduction of this special guarantee, the repayment period has been significantly extended to up to 15 years. To further reduce the guarantee fee burden for small business owners opting for long-term installment repayment, the government will subsidize the guarantee fees paid by customers.

To ensure a prompt start of guarantee services, the program will first be implemented from September 5 for customers who have obtained loans from KB Kookmin Bank, Nonghyup Bank, and Shinhan Bank through regional credit guarantee foundations. The list of eligible banks will be gradually expanded between September and October following consultations with other banks. Applications for this special support can be submitted at the regional credit guarantee foundation branches where the business was located.

Lee Soonbae, Director General for Global Growth Policy at the Ministry of SMEs and Startups, stated, "The implementation of this special guarantee program will help ease the financial burden for closed small business owners facing repayment due to loan maturity, and will contribute to encouraging their swift recovery activities."

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