Government: "1% Ultra-Low Interest Special Loans for 100,000 People in Loss Compensation Blind Spots" (Comprehensive)

Minister Kwon Chil-seung of the Ministry of SMEs and Startups Announces Support Measures for Small Business Owners
Up to 20 Million KRW Special Loans... Total Funding of 2 Trillion KRW
Various Programs to Revitalize Traditional Markets and Consumption

Kwon Chil-seung, Minister of SMEs and Startups, is delivering the opening remarks at the 1st Small Business Policy Council held at the Government Seoul Office on the 23rd.

[Asia Economy Reporter Kim Bo-kyung] The government announced that it will provide special loans of up to 20 million won at an ultra-low interest rate of 1% to small business owners who are in the blind spots of the loss compensation system. Additionally, various events to promote consumption will be held, and support for the digital transformation of small business owners will be provided.

On the 23rd, Kwon Chil-seung, Minister of SMEs and Startups, held a Small Business Policy Committee meeting at the Government Seoul Office to review and approve the "Support Plan for the Recovery of Small Businesses Affected by COVID-19" and other measures.

This plan was prepared to provide supplementary support to small business sectors indirectly affected by social distancing measures and to set the direction for small business support policies in the post-COVID-19 era.

Special Guarantee with 1% Ultra-Low Interest Rate for Loss Compensation Excluded Sectors

First, 100,000 small business owners in sectors not eligible for loss compensation due to 'personnel and facility operation restrictions' rather than 'gathering bans or business hour restrictions' will be supported with a total of 2 trillion won in special recovery loans of up to 20 million won at an ultra-low interest rate of 1%.

For example, small business owners who implemented personnel and facility operation restrictions such as allowing one person per 4㎡, 8㎡, or 16㎡, limiting occupancy to 30%, 50%, or 70%, or using 3/4 or 2/3 of rooms are eligible.

These are small business owners whose sales decreased due to personnel and facility operation restriction measures implemented from July 7 to September 30 and who opened their businesses before September 30.

Even within the same industry, eligibility for special loans varies depending on the social distancing level applied by each local government, so it is necessary to check through the Small Enterprise and Market Service (SEMAS) policy fund website notice window.

For example, in the case of singing practice rooms, in the metropolitan area under social distancing level 4, they are eligible for loss compensation due to 'operation restrictions after 10 p.m.', but in Ulleung-gun, Gyeongbuk, where level 1 is applied, they are eligible for the special recovery loan due to 'one person per 6㎡ restriction.'

To allow as many small business owners as possible to receive loans, various sales decline criteria have been established. If sales from July to September this year decreased in any quarter or month compared to the same period in 2019 or 2020, they are eligible for support.

Those who opened their businesses between June and September this year without tax retention data are included in the support regardless of sales decline.

Applications will be accepted from 9 a.m. on the 29th through the SEMAS policy fund website. To disperse simultaneous access to the application system, a five-day rotation system will be implemented during the first week, but from the 4th of next month, applications will be accepted regardless of the day of the week.

Holding Events to Promote Consumption and Supporting Digital Transformation of Small Businesses

Various programs to revitalize domestic demand and support small business sales will also be conducted. From December 18 to 26, a large-scale event called the "Christmas Market," in which nationwide shopping districts and traditional markets participate simultaneously, will be held in Mapo-gu, Seoul, to create a consumption promotion atmosphere.

From December 3 to 5, an "Excellent Market Expo" will be held in Jeju Island to enhance the image of traditional markets and hold online and offline sales events.

Additionally, until June next year, the fourth Sunday of every month will be designated as "Market Day," with plans to invigorate consumption through prize draws worth 100 million won each month.

Support for expanding online sales channels for small businesses will also be strengthened. Private channels supporting small businesses' online entry, distribution experts, and local governments will collaborate to "train 100,000 digital small business owners annually."

Infrastructure such as "Digital Commerce Studios," which provide live commerce broadcasting studios and video editing services, and "Flagship Stores," which exhibit and sell excellent small business products, will be expanded.

Support will be provided for meal kit production costs centered on excellent restaurants such as century-old stores that have been in business for over 30 years, and efforts will be made to enter meal kit experience zones at Incheon Airport. Furthermore, 1.5 trillion won worth of mobile and card Onnuri gift certificates will be issued next year to bridge the digital gap in traditional markets.