Seoul City to Provide 1 Million Won Support to Small Businesses with Over 10% Sales Decline... 159.1 Billion Won 'Livelihood Economy Support Measures' 추진

Secured 159.1 Billion Won through Early Supplementary Budget, Government Invests in Loss Compensation Blind Spots... Sequential Support from Early May
'4No Anxin Finance' Additional 200 Billion Support for 10,000 People

[Image source=Yonhap News]

[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government is set to vigorously implement support measures for the city’s livelihood economy by securing 159.1 billion KRW through an emergency early supplementary budget. These measures aim to assist small business owners, SMEs, and employment-vulnerable groups who have suffered cumulative damage due to the prolonged COVID-19 pandemic.

According to Seoul City on the 27th, the support measures consist of 141.5 billion KRW for direct support projects such as financial aid and job creation, and 17.6 billion KRW for indirect support projects including loans and gift certificate issuance. The total actual support scale, combining direct and indirect support, reaches 376.5 billion KRW. The support plan is composed of 12 detailed projects across three sectors: ▲Support for Overcoming Small Business Crises (103.3 billion KRW) ▲Strengthening Employment Safety Nets (48.9 billion KRW) ▲Enhancing Competitiveness of Urban Manufacturing and SMEs (6.9 billion KRW).

First, 103.3 billion KRW will be invested to support small business owners and self-employed individuals who were severely impacted by the prolonged COVID-19 pandemic. Approximately 77,000 small business owners in crisis sectors with sales declines of 10% or more will receive a ‘Crisis Management Support Fund’ of 1 million KRW each. Online applications are scheduled to begin on the 20th of next month. This is intended to strengthen gap support for small business owners excluded from government loss compensation because they were not subject to gathering bans or business restrictions despite experiencing sales declines due to COVID-19.

The ‘4-No (No Interest, No Guarantee Fee, No Collateral, No Paperwork) Safe Finance’ program, which has received strong support from small business owners, will this time provide support totaling 300 billion KRW to about 10,000 companies and small business owners who started or restarted their businesses after the outbreak of COVID-19 in 2020. Applications will open on May 2. The ‘Metropolitan e-Seoul Love Gift Certificate,’ discounted by 7%, will be issued online from early July with an increased scale from the original 21.7 billion KRW to 56.7 billion KRW, aiming to revive consumption in local shopping districts.

Small business owners facing the risk of closure will receive 3 million KRW for business closure and restart costs. This applies to 3,000 small businesses that closed between 2021 and June 2022, providing support for business closure expenses such as restoration costs and funds for preparing to restart, helping them to close or restart their businesses with peace of mind. Applications will be accepted from mid-May, with payments starting in June after eligibility review.

To strengthen the employment safety net for citizens facing an employment cliff due to the COVID-19 economic crisis, 48.9 billion KRW will be invested. Applications will begin sequentially from early May. Among companies that closed and restarted after 2020, 10,000 small business owners who hired new employees in 2022 will receive an ‘Employment Incentive’ of 1.5 million KRW. Additionally, up to 1.5 million KRW in ‘Unpaid Leave Worker Support’ will be provided to 10,000 workers in small businesses, special employment support sectors, and companies with fewer than 50 employees. Applications for all will start from the 10th of next month at 25 autonomous districts.

An additional 18.7 billion KRW will be invested in public jobs to provide 568 ‘Seoul-type New Deal Jobs’ and 1,039 ‘Seoul Citizen Safe Jobs.’ The ‘Seoul-type New Deal Jobs’ recruitment announcement will be posted on the Seoul Job Portal in May, and applications for the ‘Seoul Citizen Safe Jobs’ will be accepted at district community service centers starting May 2.

Furthermore, 6.9 billion KRW will be additionally invested to strengthen the foundation of SMEs and the root industries. Up to 8 million KRW will be provided to 1,000 urban manufacturing companies such as apparel manufacturing, machinery and metal, and jewelry to improve working environments and actively support digital transformation using advanced technologies like IoT and AI, R&D advancement, and job matching. To prevent chain bankruptcies of SMEs, 50% of the insurance premium (up to 2 million KRW) will be supported for those subscribing to ‘Accounts Receivable Insurance.’ A total of 20 billion KRW will be invested, with applications starting in May.

Kim Ui-seung, Director of Planning and Coordination at Seoul City, said, “Although COVID-19 is gradually entering a recovery phase, small business owners and self-employed individuals who have accumulated losses for more than two years still desperately need help. Despite the fiscal year-end, we have executed an early supplementary budget and will ensure the swift disbursement of secured funds so that this Seoul livelihood economy support plan can contribute to stabilizing people’s livelihoods as quickly as possible.”