"Save Small Business Owners"... Hwaseong City’s Various Financial Support Measures Draw Attention

Special Guarantee Period and Interest Rates More Favorable Than Other Local Governments
Mayor Jeong Myeong-geun "Discovering Various Small Business Support Projects"

Hwaseong City in Gyeonggi Province is continuously introducing various support measures for small business owners who are struggling due to reduced consumer spending.

According to Hwaseong City on the 21st, the city is implementing ▲Special Guarantee Project ▲Special Guarantee Fee Support Project ▲Interest Rate Differential Compensation Project to alleviate the financial burden on small business owners.

The 'Small Business Special Guarantee Project' is a program that issues a guarantee certificate from the Gyeonggi Credit Guarantee Foundation without collateral to low-credit small business owners who lack collateral. It supports loans of up to 50 million KRW per business for a maximum of 5 years. The city also supports the special guarantee fee, which is about 1% of the loan amount, once upon application for the special guarantee.

The 'Small Business Interest Rate Differential Compensation Project' is a program that limits the maximum additional interest rate on special guarantee loans through agreements with 12 commercial banks and compensates 2% of the loan interest up to 50 million KRW for a maximum of 5 years. Compared to most local governments that compensate interest rate differentials for 1 to 2 years, this offers more favorable conditions.

The city explained that, especially compared to last year, the average special guarantee loan interest rate for small business owners in the first quarter of this year decreased from 5.89% to 5.51%, and with the city’s interest rate differential compensation, the effective interest rate borne by small business owners dropped to an average of 3.51%. This is also 0.5 percentage points lower than the average loan interest rate of other local governments.

Meanwhile, over the past five years, the city has invested a budget of 16 billion KRW to support special guarantee loans totaling 154 billion KRW to 6,779 businesses in the area and provided 1.2 billion KRW in special guarantee fees to 5,422 businesses. For small business owners who received loans through Hwaseong City’s partner banks under the special guarantee, the city compensated 4.9 billion KRW in loan interest.

Jung Myung-geun, Mayor of Hwaseong City, stated, "We will continue to discover and implement various projects to support small business owners financially and stabilize people’s livelihoods."