Songpa-gu Supports Small and Medium Enterprises with 1.5% Annual Loan in the Era of 3 Highs

Songpa-gu to Promote Loan Support Worth 12 Billion KRW for Small and Medium Enterprises and Small Business Owners

Maintaining Ultra-Low Interest Rate of 1.5% per Year, Loans up to 200 Million KRW per Company

Year-Round Operation for Prompt Financial Support

Seok-Suk Seo, Mayor of Songpa District

[Asia Economy Reporter Park Jong-il] Songpa-gu (Mayor Seo Gang-seok) announced that it will implement loan support totaling 12 billion KRW for small and medium enterprises (SMEs) and small business owners in the area who are experiencing financial difficulties due to high interest rates, high prices, and high exchange rates.

The support targets SMEs that have business establishments in Songpa-gu and have been registered for more than six months, have sales performance, and possess collateral capacity according to bank credit regulations. However, companies currently repaying Songpa-gu SME Development Fund loans, those in excluded industries for loan support, or companies with tax arrears are excluded from eligibility.

Despite consecutive base rate hikes, the district plans to maintain the loan interest rate at a fixed 1.5% per year to alleviate the burden on local companies facing difficulties.

The total support amount is 12 billion KRW, consisting of 4 billion KRW from the SME Development Fund (fixed interest rate 1.5%) and 8 billion KRW of cooperative funds secured through an agreement with Woori Bank (CD rate + 1.7%) after the fund is exhausted. Each company can borrow up to 200 million KRW, with a loan period of 5 years, including a 2-year grace period and 3 years of equal installment repayments.

This loan support program operates year-round without a separate application period. Funds will be provided promptly through periodic reviews.

Companies wishing to apply for loans should prepare the required documents and visit the Woori Bank Songpa-gu Office Branch (1st floor of Songpa-gu Office main building) for a preliminary consultation to verify collateral capacity, then submit their application in person to the Economic Promotion Division of Songpa-gu Office. Detailed information can be found in the notices section on the Songpa-gu Office website.

Additionally, for SMEs and small business owners lacking sufficient collateral, an 8.2 billion KRW credit guarantee recommendation system will be simultaneously implemented in cooperation with the Credit Guarantee Foundation, issuing guarantees up to 50 million KRW per company.

Meanwhile, last year, the district promoted the ‘Three-Pronged Market Development Support’ project to aid the recovery of SMEs whose difficulties were exacerbated by the prolonged COVID-19 pandemic. This supported 40 local companies with ▲acquisition of excellent domestic and international certifications ▲participation in domestic and international exhibitions ▲market development and marketing.

Seo Gang-seok, Mayor of Songpa-gu, said, “We aim to provide practical help to companies struggling with management difficulties through low-interest loan support,” adding, “We will do our best to prepare various support measures for companies so that small business owners and SMEs in the region can overcome the crisis by utilizing the Songpa-gu SME Development Fund and cooperative funds.”