Seongnam City, 2-3% Loan Interest Support for SMEs... 300 Million KRW Special Guarantee for Unsecured Companies

Seongnam City Hall Panorama

[Asia Economy (Seongnam) = Reporter Lee Young-gyu] Seongnam City in Gyeonggi Province will support 2-3% of loan interest for small and medium-sized enterprises (SMEs) struggling to secure operating funds due to the economic downturn and high interest rates. In addition, special guarantees will be provided in cooperation with the Gyeonggi Credit Guarantee Foundation for companies without collateral.

On the 6th, Seongnam City announced that it will recommend companies to seven partner banks to receive development funds of up to 500 million KRW per company and implement a project supporting 2-3% of loan interest.

If eligible companies borrow operating funds such as labor costs and raw material purchase costs from the designated banks, the city will pay 2% of the loan interest on behalf of the companies for three years.

For companies that suffered damage from disasters such as heavy rain, the city will cover 3% of the interest amount for three years. The city has allocated a budget of 2.2 billion KRW this year to support loan interest.

The support targets are companies with headquarters or business sites in Seongnam City that meet one of the following criteria: ▲manufacturers with a manufacturing ratio of 30% or more of total sales ▲venture companies ▲technology innovation companies ▲Seongnam City strategic industry companies with annual sales under 3 billion KRW.

The city also provides special guarantees of up to 300 million KRW for SMEs that have difficulty obtaining development funds from banks due to lack of real estate collateral.

The special guarantee system allows Seongnam City to act as a guarantor on behalf of small businesses so that financial institutions can lend funds without collateral.

To operate the system, the city contributed 800 million KRW this year to the Gyeonggi Credit Guarantee Foundation as a special guarantee fund for SMEs. The special guarantee period is three years.