Support for businesses with low credit but strong viability and competitiveness
Applications open for general management stabilization funds regardless of business duration
The Ministry of SMEs and Startups and the Small Enterprise and Market Service announced that applications for the ‘Low-Credit Small Business Fund’ will be accepted starting from the 6th.
This fund is being implemented in accordance with the government’s ‘Enhanced Customized Support Plan for Small Businesses and Self-Employed’ announced the previous day. It is a dedicated fund for credit-vulnerable small business owners who face difficulties in securing financing through private financial institutions, and will be provided through direct loans by the Small Enterprise and Market Service.
The support targets small business owners who have completed the credit management education by the Credit Recovery Committee in advance through affiliated training within the Small Business Knowledge Learning Center, have been in business for more than 90 days, and whose representative’s personal credit score (NCB) is 839 points or below. The fund offers a variable interest rate (4th quarter 4.72%) which adds 1.6 percentage points to the policy fund base rate, providing up to 30 million KRW for 5 years (2 years grace period, 3 years repayment). To promote credit recovery for small business owners, if credit improves after one year of loan issuance, the borrower can apply for an interest rate reduction system that lowers the rate by 0.5 percentage points.
To support small business owners with low credit but strong business performance and competitiveness, loan approval and amounts will be determined through a comprehensive review of business viability. However, applications are not accepted if the applicant falls under direct loan restrictions for small business policy funds, such as tax delinquency, arrears, business suspension or closure, excluded industries, infringement of business or owner-occupied housing rights, full erosion of equity capital, excessive debt ratio, or excessive borrowings. For corporate businesses, a separate responsible management review of the corporation and its representative will be conducted, and loans will be restricted if disqualifications or insufficient evaluation results are found.
For individual businesses, the entire process of application, review, and contract signing will be conducted online and non-face-to-face. For corporate businesses, online application and review are followed by the representative’s direct visit to the local Small Enterprise and Market Service center to sign the written contract.
Additionally, the General Management Stabilization Fund, which is available regardless of business duration, will be provided with a variable interest rate (4th quarter 3.72%) adding 0.6 percentage points to the policy fund base rate, offering up to 70 million KRW for 5 years (2 years grace period, 3 years repayment). The General Management Stabilization Fund is operated through an intermediary loan method where the Small Enterprise and Market Service verifies eligibility and loan approval and amounts are determined through financial institution evaluation.
The General Management Stabilization Fund can be applied for starting at 11 a.m. on the same day, and the Low-Credit Small Business Fund from 2 p.m. on the same day via the Small Business Policy Fund website. Detailed information can be found in the announcements on the Small Business Policy Fund website.
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