Small Business Owners Maintaining Youth Employment Eligible for Ultra-Low Interest Loans of 30 Million Won at 1% Rate

Interest Rates Reduced from 1.73~2.13% to 1.33~1.73% for 1-Year Employment Retention After Loan

[Asia Economy Reporter Kim Jong-hwa] The Ministry of SMEs and Startups announced that starting from the 17th, it will provide a total of 500 billion KRW in loans at ultra-low interest rates in the 1% range to small business owners who maintain youth employment. Approximately 16,000 small business owners, where youth are either the representatives or employees, can receive loans of up to 30 million KRW per business.

The support targets include small business owners whose representatives are youth aged 39 or younger, small business owners where youth constitute the majority of regular employees, or small business owners who have employed at least one youth worker within the past year and have maintained that employment. Meeting any one of these three conditions qualifies for support.

If small business owners maintaining youth employment keep the employment for one year after receiving the loan, the interest rate, which was 1.73?2.13% in the first year, will be reduced by 0.4 percentage points to 1.33?1.73% from the second year onward. The ultra-low interest loan for maintaining youth employment is processed through proxy loans via commercial banks, and the loan period is five years (two years grace period, three years repayment).

Youth-employing small business owners wishing to apply for the loan must first access the Small Business Policy Fund website to obtain a Small Business Policy Fund Support Eligibility Certificate.

At this time, since small business information is verified using the Administrative Information Joint Network, small business owners with youth representatives only need to enter their personal and business information without additional documents. However, small business owners who employ youth workers must upload, in addition to their personal and business information, the subscriber list of the four major social insurances and a pledge to maintain youth employment.

Small business owners who have obtained the Small Business Policy Fund Support Eligibility Certificate can visit credit guarantee institutions such as the Credit Guarantee Foundation, Credit Guarantee Fund, and Technology Guarantee Fund, as well as 18 banks including NongHyup, Shinhan, Woori, Hana, Industrial Bank, Kookmin, Gyeongnam, Gwangju, Daegu, Busan, Forestry Cooperative, Suhyup, Credit Union, Jeonbuk, Jeju, SC First Bank, Citibank, and Saemaeul Geumgo to apply for the loan.

For credit guarantee institutions where online verification is possible, submission of the Support Eligibility Certificate is not required. However, banks require a printed copy of the Support Eligibility Certificate to be submitted.

Small business owners who wish to receive the interest rate reduction after one year must visit the local center of the Small Enterprise and Market Service to obtain a confirmation of employment maintenance and then visit the bank where the loan was received to apply for the interest rate change.

More detailed information can be found on the Small Business Policy Fund and Small Enterprise and Market Service websites, and consultations and guidance are available through the SME Integrated Call Center.