Approximately 2 Trillion Won of 'Loss Compensation Advance Payment' Completed... Deadline at Midnight on the 9th

[Asia Economy Reporter Donghyun Choi] The Ministry of SMEs and Startups announced that as of 6 p.m. on the 8th, approximately 390,000 businesses have received about 2 trillion won through advance payment applications for loss compensation over the past three weeks.

This advance payment for loss compensation targets 550,000 small business owners and small enterprises that have been subject to operating hour restrictions due to government quarantine measures since December 6 of last year. Applicants will receive an advance payment of 2.5 million won each for the fourth quarter of last year and the first quarter of this year, totaling 5 million won. Although it is formally a loan, no interest will be applied until the loss compensation amount is finalized. As of 6 p.m. on the day, 424,237 businesses had applied, and 391,490 businesses received 1.9575 trillion won.

When categorizing small business owners and small enterprises who received advance loss compensation by major industry sectors, restaurants and cafes accounted for 82.9% (324,709), entertainment facilities 6.1% (23,875), indoor sports facilities 4.8% (18,634), and karaoke rooms 4.8% (18,598). By age group, those in their 50s accounted for the largest share at 31.3%, followed by those aged 60 and above at 24.7%, and those in their 40s at 24.4%.

The application period for this advance loss compensation is scheduled to close at midnight between the 9th and 10th. Applicants must complete the agreement by 4 p.m. on the 11th to receive the advance payment. Subsequently, when the loss compensation for the fourth quarter of 2021 and the first quarter of this year is finalized, the confirmed compensation amount will be sequentially deducted from the 5 million won advance payment. If there is a remaining balance, it can be repaid over five years (a two-year grace period from the advance payment date, followed by three years of installment repayment) with no early repayment fees.

Additionally, beyond the 550,000 businesses eligible for this advance payment, facilities newly subject to loss compensation due to personnel restrictions and businesses confirmed as eligible for loss compensation after complying with operating hour restrictions since January of this year can apply for the "2022 first quarter advance payment" of 2.5 million won at the end of this month or early March. Detailed schedules will be announced later.

Kang Seongcheon, Vice Minister of the Ministry of SMEs and Startups, stated, "It is fortunate that the majority who urgently needed compensation received advance payments before the Lunar New Year holiday," and added, "We will do our utmost to ensure that the advance payment for the first quarter loss compensation to be conducted later this year can also be received promptly."