Gwangju City to Provide Additional 100 Billion Won in Emergency Funds to Small Businesses Facing Management Crisis

Announcement of the 11th COVID-19 Livelihood Stabilization Measures... Additional Support for the 3rd Round of Unsecured, Interest-Free, and Guarantee Fee-Free Loans

Lee Yong-seop, Mayor of Gwangju Metropolitan City, is giving the 11th briefing on public safety measures on the afternoon of the 21st at the briefing room on the 5th floor of the city hall. Photo by Gwangju Metropolitan City

[Asia Economy Honam Reporting Headquarters Reporter Park Seon-gang] Gwangju Metropolitan City announced on the 21st that it will additionally provide 100 billion KRW in special guarantee loans with the three no-benefits of no collateral, no interest, and no guarantee fees to small business owners and self-employed individuals who have suffered damage due to the prolonged COVID-19 pandemic but lack collateral capability.

This emergency management stabilization fund follows Gwangju City's nationwide first support of the three no-benefits special guarantee loans to small business owners and self-employed individuals affected by COVID-19 in March last year. After the second round of 50 billion KRW three no-benefits special guarantee loans supplied on December 30 last year was fully subscribed within one day, additional support measures were prepared.

The loan conditions and interest and guarantee fee support (for one year) for this third round of special guarantee loan support (three no-benefits) are the same as those of the second round. However, for fairness, priority will be given to small business owners who did not receive the benefits of the first and second rounds of the three no-benefits special guarantee loans.

Eligibility applies to all small business owners located in the Gwangju area, excluding certain industries such as entertainment, gambling, and speculative businesses, who are new applicants that did not receive the first or second round of three no-benefits special guarantee loans.

Applicants can request funds up to a maximum of 20 million KRW per business.

The loan conditions allow borrowing without collateral through screening and guarantee by the Gwangju Credit Guarantee Foundation, with a lump-sum repayment after two years and a maximum extension period of five years. Loans will be provided by Gwangju Bank, Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank, and Hana Bank (in alphabetical order). The loan interest rate is 2.7%, and the guarantee fee is 0.7%.

Gwangju City will support the guarantee fees and loan interest for one year from the loan execution date to alleviate the financial burden on small business owners. Furthermore, after one year, the borrower must bear the interest and guarantee fees, but considering the difficult economic situation, the interest rate has been kept as low as possible.

Small business owners wishing to apply for the ‘Third Round of COVID-19 Crisis Overcoming Small Business Special Guarantee Loan Support (Three No-Benefits)’ can make reservations for consultations starting from the 1st of next month via the Gwangju Credit Guarantee Foundation’s consultation reservation website or consultation center, and can apply and consult at Gwangju Bank, Kookmin Bank, NongHyup Bank, Shinhan Bank, Woori Bank, and Hana Bank.

In addition, Gwangju City has also prepared support measures for small business owners and self-employed individuals who complied with the administrative order to close entertainment establishments (November 24, 2020).

Small business owners who complied with the administrative closure order in the Gwangju area can receive loans (up to 10 million KRW) through the ‘Rental Fee Loan Program for Small Businesses in Closed Sectors’ implemented by the Small Enterprise and Market Service starting from the 25th. In this case, Gwangju City will support the interest for two years.

The Small Enterprise and Market Service will announce the loan application methods and procedures on its website. The eligible applicants are small business owners in closed sectors, and loans will be available from the 25th until the budget is exhausted. Procedures and methods for the two-year interest support will be announced on the Gwangju City Hall website on the 1st of next month.

Lee Yong-seop, Mayor of Gwangju Metropolitan City, said, “As the high-intensity social distancing measures continue, the pain and damage to small business owners and self-employed individuals are increasing. To alleviate these difficulties, which are a crucial pillar supporting the local economy, we have prepared the third additional support plan following the second round of special guarantee loan support (three no-benefits). We have also prepared support measures for entertainment establishments and other businesses subject to closure orders that have suffered great difficulties due to exclusion from commercial bank loan support despite being unable to operate.”

He added, “We will continue to closely monitor the livelihood economy situation and prepare multifaceted support measures for small business owners, self-employed individuals, and citizens affected by COVID-19.”