Gyeonggi-do Confirms 2 Trillion Won for 'Small and Medium Business Development Fund' Next Year

COVID-19 Recovery... Focus on Fostering New Growth Engines
KRW 1.4 Trillion Operating Funds for Business Stability
KRW 600 Billion Facility Funds for Startup and Competitiveness Enhancement

Reference photo [Asia Economy DB]

[Asia Economy Reporter La Young-cheol] Gyeonggi Province has finalized the scale of next year's small and medium-sized enterprise (SME) development funds at 2 trillion won to help stabilize the management of SMEs and small business owners within the province.

On the 29th, Gyeonggi Province stated, "Next year, we plan to focus on economic recovery from the COVID-19 situation and support for fostering new growth engines."

The support scale consists of 1.4 trillion won in working capital for management stabilization and 600 billion won in facility funds for start-ups and competitiveness enhancement, totaling 2 trillion won.

Specifically, the 1.4 trillion won in working capital is divided into 1.1 trillion won for COVID-19 recovery support, 100 billion won for sustainable management support, 90 billion won for innovation growth leading support, and 110 billion won for special management funds.

The 600 billion won in facility funds will be used for factory purchase costs, construction costs, and so on.

The loan interest rate is 2.55%, and to respond quickly to the rapidly changing financial market, it can be adjusted according to changes in the Bank of Korea's base rate. The loan interest differential compensation ranges from 0.3% to 2.0%.

In particular, to support small business owners struggling due to the prolonged COVID-19 pandemic, the guarantee fee will be fully waived for one year, and to prevent damage caused by loan delinquency, the principal repayment grace period will be extended by up to six additional months.

Among the facility funds, 100 billion won has been allocated as 'sustainable growth facility funds' for carbon-neutral companies, job-creating companies, domestic material, parts, and equipment companies, and companies possessing technological capabilities (patents, certifications, etc.).

Support will be provided at an interest rate of 2.25% (a 0.3% discount from the basic rate) within 3 billion won per company to foster growth engines.

A new working capital support item of 50 billion won for 'innovation growth engine companies' related to the 4th Industrial Revolution has also been established.

Companies possessing patents or technological capabilities, or those involved in provincial strategic projects, 4th Industrial Revolution-related businesses, or root industry manufacturing companies can receive support at a fixed interest rate of 1.75% within 500 million won per company.

Funds for business owners dreaming of a comeback and youth start-ups have also been prepared. A special management fund of 3 billion won for the Hope Special Case (re-challenge) and support for youth innovative start-ups at a fixed interest rate of about 1% will be provided on a scale of 10 billion won.

In addition, a reserve fund of 82 billion won has been prepared to respond to economic crisis situations such as COVID-19.

Ryu Gwang-yeol, Director of the Economic Office, said, "We will devote ourselves to lowering the burden on small business owners and SMEs going through difficult times and to capturing both recovery and growth by establishing sustainable growth facility funds."