Seocho-gu Jokbal Restaurant and Other Self-Employed Receive 20 Million Won Loans with Minimal Screening

Small business owners previously unable to get loans due to credit rating, guarantee limits, and guarantee history can now apply... First-come, first-served at Woori Bank until the end of November

[Asia Economy Reporter Jongil Park] Seocho-gu (Mayor Eunhee Cho, photo) has decided to implement the ‘COVID-19 Overcome Ultra-Speed Loan’ through the Seoul Credit Guarantee Foundation to alleviate the financial difficulties of small business owners facing management crises due to the resurgence of COVID-19.

The ultra-speed loan became possible by significantly simplifying the existing procedure that went through Seocho-gu → guarantee institution → bank, changing the process so that applicants only need to visit the bank to quickly proceed from application to loan in a one-stop manner (previously up to 2 months → now possible within about 1 week).

The support target is small business owners currently operating businesses located in Seocho-gu.

In particular, this ultra-speed loan includes low credit rating individuals and companies that were excluded from previous government, Seoul City, and Seocho-gu loan support projects due to credit guarantee limits or guarantee history, providing a minimum of 20 million KRW each in lump-sum loan support. Initially, about 450 companies can use this service, but it plans to allow any small business owner who wishes to take out a loan in the future to use it.

Therefore, companies with personal credit ratings from 1 to 8, those with guarantee history from guarantee institutions within the past year, or those already using beyond their credit guarantee limit can also apply for loans. The annual average interest rate is expected to be 1.6%, and the repayment method is a 1-year grace period followed by 3 (or 4) years of equal installment repayments.

The application period is on a first-come, first-served basis until November 30, and applicants can visit any of the seven Woori Bank branches in the area to apply. For detailed consultation, contact the respective Woori Bank branch.

Mr. Kim, who runs a small jokbal (pig’s trotters) restaurant in Maljukgeori Market, said that after the COVID-19 resurgence, sales plummeted by over 90%, making it impossible to cover monthly rent and labor costs of 8 million KRW, seriously considering closing his business. Mr. Kwon, who runs a chicken restaurant near the entrance of Cheonggyesan, had to lay off two employees due to labor cost burdens and has exhausted the store deposit, facing imminent closure. Both have low credit ratings and were struggling as loans were blocked, but upon hearing about Seocho-gu’s ultra-speed loan, they found new hope and plan to immediately take out loans to put out urgent fires and continue their businesses.

Meanwhile, Seocho-gu has been utilizing the third supplementary budget passed in July by drastically reducing unnecessary exhibition budgets such as various festival budgets and reallocating them to COVID-19 disaster response budgets.

Additionally, Seocho-gu provided 8 billion KRW in loans from the integrated management fund, supported newly established small business owners excluded from Seoul City’s small business support with 1 million KRW, gave 1 million KRW to businesses damaged by public disclosure of movement paths after confirmed COVID-19 cases, and provided 500,000 KRW for public utility bills such as electricity during summer to small business owners.

Seocho-gu Mayor Eunhee Cho said, “This loan is a support measure for small business owners driven to the brink of closure due to the resurgence of COVID-19. We will continue to do our best to support overcoming the COVID-19 crisis in the region.”