Ministry of SMEs Supports Small Business Owners in High-Risk Facilities Like Karaoke and PC Bang

Up to 10 Million Won, 2.0% Interest Rate, Total Support of 900 Billion Won

On the 19th, the government strengthened social distancing measures in the metropolitan area to curb the explosive spread of the novel coronavirus disease (COVID-19). On this day, a notice of business suspension was posted at a karaoke room in the Youth Street of Jonggak, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Heeyoon] Up to 10 million KRW in support will be provided to high-risk facilities whose operations have been suspended due to the resurgence of the novel coronavirus infection (COVID-19).

The Ministry of SMEs and Startups announced on the 24th that it plans to provide financial support of up to 10 million KRW by accepting applications mainly from high-risk facilities severely affected by COVID-19, such as PC bangs and karaoke rooms.

The government previously established a financial support program totaling 26.4 trillion KRW?16.4 trillion KRW in the first phase and 10 trillion KRW in the second phase?to provide emergency liquidity to small business owners affected by COVID-19, and as of the 17th, 14.9 trillion KRW has been disbursed.

This program will utilize the remaining 900 billion KRW from the Regional Credit Guarantee Foundations. The plan is to continue financial support for small business owners, focusing on high-risk facilities whose operations have been suspended due to strengthened social distancing measures.

Small business owners classified as high-risk facilities, including karaoke bars, emotional pubs, hunting pubs, karaoke rooms, indoor standing concert halls, indoor group exercise facilities, direct sales promotion centers such as door-to-door sales, large academies (with 300 or more people), buffets, and PC bangs, whose operations have been suspended since the 23rd of last month, can receive loans of up to 10 million KRW with a 3-year term at an interest rate of 2.0% from commercial banks using guarantees from the Regional Credit Guarantee Foundation.

If a loan was already used through the first phase program, duplicate support is not possible; however, guarantees can be obtained concurrently with the second phase program. Applications can be submitted from the 29th through 12 commercial banks nationwide.

No Yongseok, Director of Global Growth Policy at the Ministry of SMEs and Startups, said, “By providing financial support to industries severely affected by the gathering ban measures, such as high-risk facilities, due to the recent resurgence of COVID-19, we expect to meet the urgent funding needs of approximately 90,000 small business owners.”