Gwangju Nam-gu Expands Special Guarantee Support for Small Business Owners

Nam-gu, Gwangju Metropolitan City, is expanding special guarantee support for small business owners.

To ease the financial burden on small business owners, Nam-gu increased the interest rate differential compensation rate, which was supported at 3% annually last year, to 4%, and for this year only, it will provide a preferential interest rate of up to 1% when loans are taken from Gwangju Bank within 40% of the total loan amount.

This is based on a special guarantee support agreement among Nam-gu, Gwangju Credit Guarantee Foundation, and Gwangju Bank. Through this agreement, Nam-gu and Gwangju Bank have each invested 200 million KRW and 50 million KRW respectively to alleviate the management difficulties of local small business owners, and the Gwangju Credit Guarantee Foundation will prepare policy loan funds for local small business owners amounting to 12 times the combined contributions from the two institutions.

It is known that this is the first time Gwangju Bank has partnered with Nam-gu Office to provide special guarantee support.

Accordingly, the scale of special guarantee loans provided to local small business owners this year is 3 billion KRW, an increase of 1.2 billion KRW compared to 1.8 billion KRW last year.

Loans through special guarantees can be obtained from any commercial bank, but when borrowing through Gwangju Bank, a preferential interest rate of 1% will be applied to reduce financial interest costs.

In addition, Nam-gu supports an annual guarantee fee of 0.7% incurred during the loan process so that local small business owners can focus on their business activities in a more stable environment.

Local small business owners can receive special guarantee loans up to 20 million KRW from next month until the contributions are exhausted.

A Nam-gu official said, "Through the increase in interest differential support, application of preferential interest rates, and guarantee fee support, we will help local small business owners secure management funds at a lower cost from financial institutions."