Loan Program for Rent of Small Business Owners in Restricted Sectors Starts from the 25th

Small business owners affected by the resurgence of the novel coronavirus infection (COVID-19) are waiting for consultations related to the support fund at the Seoul Jungbu Center of the Small Enterprise and Market Service. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Jong-hwa] Starting from the 25th, support for 'rental fee loans' targeting small business owners in restricted gathering industries will begin.

This government loan support is a low-interest rental fee loan for small business owners in restricted gathering industries who have faced difficulties in management due to the escalation of social distancing levels.

As the name "rental fee loan" suggests, only "rental small business owners" can apply for this loan. Small business owners operating their businesses in self-owned premises are excluded from the support. Therefore, when applying for the loan, both individual and corporate business owners must submit a "lease contract" as a mandatory document, so preparation in advance is necessary. Additionally, corporate business owners need to provide documents such as the Certificate of Corporate Registration and Corporate Seal Certificate.

The eligible industries for loan application include five types of entertainment facilities: nightclubs, karaoke bars, emotional pubs, hunting pubs, and colatecs, as well as small business owners in restricted gathering industries such as singing practice rooms, indoor standing concert halls, direct sales promotion centers, indoor sports facilities, and academies (including tutoring centers).

The loan limit is 10 million KRW per business, with a fixed interest rate of 1.9%, and the loan period is 5 years (2 years grace period, 3 years repayment). The allocated budget is approximately 1 trillion KRW, expected to benefit a total of 100,000 people.

Small business owners wishing to apply can do so via Shinhan Bank's mobile app (sol) for individual business owners, and corporate business owners can apply non-face-to-face through the Small Enterprise and Market Service website.

However, small business owners whose business registration date is after December 1, 2020, those with tax arrears or financial institution delinquencies, those who have closed or suspended their business, and businesses with no sales from January 1, 2020, until the application date are excluded from support.

Small business owners (individual and corporate) not included in the support for the emergency relief fund can obtain a "Restricted Gathering Confirmation" and visit the local Small Enterprise and Market Service center to apply. Loan applications will be available from 9 a.m. on the day, and it is expected to take 4 to 6 days from application to deposit.

An official from the Ministry of SMEs and Startups stated, "This loan support is literally for rental small business owners," adding, "Some small business owners may misunderstand from the name 'rental fee loan' that the loan must be used only for rent payments, but the use of the loan amount is not restricted."