Yongsan-gu Provides Interest-Free Loans to Over 1,000 Small Business Owners... 20 Billion Won Scale

From this month until funds are exhausted, small business owners operating for over 6 months in the region will receive 20 million KRW per company with 1-year interest-free support... thereafter, interest rates of 2-3% apply

[Asia Economy Reporter Park Jong-il] Yongsan-gu (Mayor Seong Jang-hyun) is launching a 20 billion KRW interest-free loan support program for small business owners as part of its measures against the novel coronavirus infection (COVID-19).

This is in accordance with Article 6 (Special Guarantee Support) of the Seoul Metropolitan Government Yongsan-gu Ordinance on Support for Small Business Owners.

The project period is from the 10th until funds are exhausted, and the support targets are small business owners who have registered their business locally and have been operating for more than six months. Personal credit scores must be 595 points (formerly grade 7) or higher.

Companies restricted from guarantees by the Seoul Credit Guarantee Foundation and those receiving guarantees from the Seoul Credit Guarantee Foundation since January 1, 2021, are not eligible for support.

The loan limit is 20 million KRW per company, with a one-year grace period and four years of equal installment repayment. The interest rate is interest-free for one year from the loan execution date, and thereafter an interest rate of 2-3% applies.

Those wishing to apply can submit an application form at designated reception centers (Shinhan Bank Yongsan-gu Office, Itaewon, Dongbu Ichon-dong branches; Shinhan Bank Hannam-dong Financial Center; Hana Bank Sookdaeipgu Station, Hannam 1-dong, Ichon-dong, Seobinggo branches).

This policy is based on a four-party agreement among the district office, Shinhan Bank, Hana Bank, and the Seoul Credit Guarantee Foundation. Accordingly, the district office contributed 1.4 billion KRW, Hana Bank 200 million KRW, totaling 1.6 billion KRW as guarantee funds, setting the loan limit at 20 billion KRW (12.5 times the contribution). This scale can support over 1,000 people.

The district office will pay all loan interest incurred over the next year.

Mayor Seong Jang-hyun of Yongsan-gu said, “We are preparing various measures to help small business owners struggling due to the prolonged COVID-19 pandemic,” and added, “We hope the interest-free loan for one year will ease their difficulties even a little.”

Last March, the district signed a ‘Special Credit Guarantee Business Agreement’ with Shinhan Bank and the Seoul Credit Guarantee Foundation. The foundation will support credit guarantees after screening companies recommended by the district. The limit is 15.6 billion KRW.

For more details, inquiries can be made to the Seoul Credit Guarantee Foundation Yongsan branch.

Additionally, the district plans to actively support local small and medium-sized enterprises through a 7 billion KRW loan support program for small and youth enterprises, support for small business owners who closed due to business suspension or restrictions, operation of the Itaewon commercial district revitalization task force, customized bidding information system operation, “one department, one economic revival” initiative, and early execution of finances.