'Small Business New Hope Fund'... Who Is Eligible for Support?

3.2 Trillion KRW Scale
Ministry of SMEs and Startups Q&A Summary

Seoul Jung-gu Small Business Cluster Area (Photo by Hyunmin Kim kimhyun81@)

[Asia Economy Reporter Kim Daeseop] The Ministry of SMEs and Startups announced on the 15th that it has organized the criteria for support targets, etc., for the 3.2 trillion won 'Small Business New Hope Fund' out of the government's total 7.8 trillion won 4th supplementary budget in a Q&A format.

First, regarding the reason for setting the criterion of small business owners with sales of 400 million won or less, the emphasis was placed on supporting micro small business owners. The New Hope Fund aims to support micro small business owners who are experiencing business difficulties such as decreased sales due to the spread of the novel coronavirus infection (COVID-19).

Considering the average sales of small business owners (240 million won as of 2018), the micro card merchant standard (300 million won), and budget constraints, the support target was set as small business owners with annual sales of 400 million won or less to help as many people as possible. This corresponds to 86% of all small business owners.

Regarding the possibility of payment before Chuseok, preparations are underway. For business owners whose sales decrease can be confirmed through administrative information and small business owners identified as special damage industries, payments will be made quickly through online applications. To this end, the plan is to quickly pre-identify payment targets using administrative information.

Depending on the timing of the National Assembly's passage and confirmation of the government budget, preparations are being made to allow applications and disbursements before Chuseok. However, small business owners whose sales decrease cannot be confirmed through administrative information will receive the New Hope Fund after verification procedures through local governments.

Entertainment bars and colatecs are not eligible for this New Hope Fund support. The government consistently excludes entertainment bar businesses and dance hall operations such as colatecs from small business policy fund loans.

Individual taxi operators with annual sales of 400 million won or less and decreased sales this year can apply for the New Hope Fund. Corporate taxi drivers are employees of companies and do not qualify as small business owners, thus are not included in the New Hope Fund support targets.

Lottery sales businesses are not eligible for this Small Business New Hope Fund support. The government consistently excludes lottery sales businesses from small business policy fund loans. The New Hope Fund is a project for small business owners experiencing business difficulties such as decreased sales due to the spread of COVID-19. Unregistered businesses without business registration do not qualify as small business owners.

However, the government operates emergency livelihood support for low-income groups (Ministry of Health and Welfare) and emergency employment stabilization subsidies (Ministry of Employment and Labor) for citizens suffering from COVID-19 damage. Related support systems can be utilized.

Even if sales exceed 400 million won but net profit is small and damage is significant, support cannot be received. Since it is impossible to accurately estimate the net profit of individual businesses, and considering the purpose of supporting micro small business owners, the need for prompt payment, and budget constraints, the criterion was inevitably decided as small business owners with sales of 400 million won or less.

If one representative operates multiple businesses, support payments can be received only once based on the one business with the largest sales scale and number of employees.