Applications open from the 13th... Loan approval after review
Online application available on the Small Business Policy Fund website
The Ministry of SMEs and Startups and the Small Enterprise and Market Service announced on the 8th that they will expand the eligibility and target debts for the Small Business Debt Refinancing Loan and begin accepting applications from the 13th.
The Small Business Debt Refinancing Loan is a program that refinances high-interest loans with interest rates above 7% or loans that are difficult to extend maturity at banks into low-interest loans for small business owners with medium to low credit. It was newly established this year with a scale of 500 billion KRW, providing support up to 50 million KRW per company over 10 years (no grace period, equal principal repayment). A fixed annual interest rate of 4.5% is applied.
When the comprehensive measures for small business owners were announced on the 3rd of last month, the eligibility and target debts for refinancing were expanded to more broadly support the reduction of debt burdens for small business owners. Previously, the program targeted small business owners with medium to low credit scores of 839 points or below (equivalent to grade 4 under the old system) based on NCB standards, but now it will also support small business owners with credit scores of 919 points or below (equivalent to grade 2 under the old system) who were previously in a blind spot.
In addition to business loans, personal loans held by individual business owners that were used for business purposes within three half-year periods including the loan date (business-purpose personal loans) can also be refinanced up to 10 million KRW upon submission of supporting documents. Small business owners who have previously refinanced personal loans through the Korea Credit Guarantee Fund’s low-interest refinancing program must apply at the same branch of the bank they used for that program.
The loan execution period has also been extended by about one year from loans executed before August 31 of last year to loans executed before the announcement date of the comprehensive measures for small business owners and self-employed on the 3rd of last month.
Small business owners wishing to apply for the Small Business Debt Refinancing Loan can apply online through the Small Business Policy Fund website. Offline applications are also possible at 77 regional centers of the Small Enterprise and Market Service nationwide. After receiving a confirmation of eligibility from the Small Enterprise and Market Service, applicants can apply to one of 12 participating banks including Kookmin, Shinhan, Hana, Woori, Nonghyup, and Industrial Bank of Korea, where the final loan approval will be decided based on screening.
Park Seong-hyo, Director of the Small Enterprise and Market Service, said, “We hope that the revamped refinancing loan will be a breakthrough for small business owners to overcome difficult times, and the Service will strive to ensure prompt execution. We will continue to support the stable management environment and growth of small business owners through policy funds and customized field support.”
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