Ministry of SMEs and Startups to Hold Disaster Countermeasures Committee Meeting on 28th... Special Support Measures to Be Decided
[Asia Economy Reporter Kim Bo-kyung] The government will provide policy funds of up to 70 million KRW at an interest rate of 1.5% and extend the loan period to 7 years for small business owners in the Itaewon area.
The Ministry of SMEs and Startups held a Disaster Countermeasure Deliberation Committee meeting on the 28th to review and finalize special support measures for small business owners following the declaration of Yongsan-gu as a special disaster area.
Following the social disaster that occurred in the Itaewon area on the 29th of last month, Yongsan-gu was designated as a special disaster area, and a decrease in sales and foot traffic among small business owners in Itaewon has been confirmed. Accordingly, the Ministry of SMEs and Startups held the Disaster Countermeasure Deliberation Committee meeting in accordance with Article 23 of the Disaster SME Support Guidelines to review and finalize support measures.
First, considering the damage to small business owners caused by the rapid decline in commercial districts, basic local governments are allowed to recognize operating losses as damage amounts when issuing disaster SME (small business owner) confirmation certificates, differing from the usual practice.
Emergency management stabilization funds for small business owners and interest rate and guarantee fee reductions, guarantee ratio increases, loan period extensions, and maturity extensions for existing funds related to guarantees from regional credit guarantee foundations will be implemented.
The emergency management stabilization fund will support up to 70 million KRW per business, with the interest rate further reduced by 0.5 percentage points from 2.0% to 1.5%, and the loan period extended from 5 years (2 years grace period, 3 years installment repayment) to 7 years (3 years grace period, 4 years installment repayment).
Guarantees from regional credit guarantee foundations (special guarantees for disaster SMEs) will support up to 200 million KRW per business, with preferential guarantee fees set at 0.1% and the guarantee ratio increased to 100%.
Small business owners wishing to receive policy funds or guarantees must first obtain a 'Disaster SME (small business owner) confirmation certificate' from the basic local government (Yongsan-gu Office), then apply for and receive a guarantee certificate from the regional credit guarantee foundation, after which they can obtain loans through commercial banks.
However, in cases where a guarantee is sought, it is also possible to proceed by obtaining a 'Damage Confirmation Certificate' from the basic local government instead of the disaster SME (small business owner) confirmation certificate.
Detailed information can be found on the Small Business Policy Fund website and the Credit Guarantee Foundation Central Association website. Guidance is also available at 77 regional centers of the Small Enterprise and Market Service and 17 regional credit guarantee foundations nationwide.
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