Nowon-gu, Special Secured Loans for Small and Medium Enterprises and Small Business Owners

Loan scale totaling 3.3 billion KRW with up to 200 million KRW per company... Special low interest rate of 1.5% per year applied to overcome the COVID-19 crisis

[Asia Economy Reporter Jongil Park] Nowon-gu (District Mayor Oh Seung-rok) is implementing a special collateral loan program for small and medium-sized enterprises (SMEs) and small business owners to alleviate financial difficulties caused by the COVID-19 pandemic.

The total loan amount is 3.3 billion KRW, with up to 200 million KRW per company available for facility funds, operating funds, and technology funds.

The eligible applicants are SMEs and small business owners who have their main office registered in Nowon-gu.

This special collateral loan applies a special low interest rate of 1.5% per annum to help overcome COVID-19. Repayment conditions are flexible, allowing either a 1-year grace period followed by 4 years of equal installments or a 2-year grace period followed by 3 years of equal installments, tailored to each business's situation.

Additionally, the program has expanded eligibility to include the restaurant industry, which was previously excluded, enabling many local food service small business owners to benefit. However, financial and insurance industries, real estate, and lodging businesses remain excluded. Companies currently repaying SME development fund loans or those with overdue national or local taxes are also restricted from applying.

It is important to note that collateral capability such as real estate or credit guarantees according to bank regulations is required. If the loan is used for purposes other than intended, the loan may be recalled and retroactively subject to the general interest rate.

Required documents include ▲loan application and business plan ▲copy of business registration certificate (corporations must submit corporate registration certificate) ▲financial statements for the past two years (issued by the National Tax Service or verified by a tax accountant) ▲certificates of full payment of national and local taxes. Additional related documents can be found on the district office website.

Before applying, applicants must consult with the banks (Kookmin Bank Nowon-gu Office Branch, Industrial Bank of Korea Nowon Station Branch) to confirm the loan amount and indicate it on the application form.

Loan applications can be submitted in person at the Nowon-gu Office Job and Economy Division from the 14th to the 25th. Loans will be disbursed starting mid-October after company inspections, document reviews, and fund operation committee deliberations.

Since 1993, the district has been supporting SMEs through development fund loans, providing an average of 2.2 billion KRW annually until last year. This year, a total of 6.3 billion KRW will be specially allocated in the first and second halves to overcome the economic crisis caused by COVID-19.

District Mayor Oh Seung-rok stated, “We hope this support will help stabilize the management of SMEs and small business owners facing financial difficulties due to the COVID-19 impact. We will continue to seek various support measures to contribute to revitalizing the local economy.”