Designation as Trade Adjustment Assistance Company if Sales Expected to Decrease by Over 10% Due to FTA
Trade Adjustment Fund Offered at 2.0% Fixed Annual Interest Rate... Financial and Accounting Education Support Provided
[Asia Economy Reporter Kim Cheol-hyun] The Small and Medium Business Corporation (Chairman Kim Hak-do, hereinafter referred to as SBC) announced on the 27th that it is helping minimize damage and restore competitiveness by providing policy funds and consulting services to small and medium-sized ventures that have suffered or are certain to suffer trade damage due to FTA agreements through the Trade Adjustment Assistance Project.
As of June, South Korea has signed or is negotiating Free Trade Agreements (FTAs) with 57 countries. While many companies have benefited from FTAs as growth opportunities, some companies are concerned about sales declines due to intensified competition. The support targets are companies with more than two years of business experience in manufacturing (or service industries) whose sales (or production volume) have decreased or are expected to decrease by more than 10% compared to the same period last year for six months or one year due to increased imports from FTA partner countries.
SBC provides designated trade adjustment assistance companies confirmed to have suffered trade damage from FTA agreements with low-interest policy fund loans for three years from the designation date, financial and accounting education, and various linked policy projects.
Policy funds are provided at a fixed interest rate of 2.0% per annum, with loan periods up to 10 years for facility funds and up to 6 years for working capital. The loan limit is up to 6 billion KRW per company annually, with a working capital limit of up to 500 million KRW per year. Last year, SBC supported a total of 62 companies with 13.6 billion KRW in trade adjustment funds, and plans to support 10 billion KRW this year.
In particular, this year, SBC plans to develop and operate financial and accounting education programs necessary for financial risk management counseling and employee retraining to enhance the crisis response and survival capabilities of trade adjustment assistance companies. It is expected to provide effective information to companies that have been excluded from professional advice.
Lim Ji-hyun, Head of the SBC Re-advancement Growth Division, said, "We will support small and medium ventures to gain competitiveness in the rapidly changing global trade environment due to FTA agreements by linking various SBC projects."
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