The city of Busan is stepping in to support local businesses and small business owners struggling with imports due to volatile exchange rates.
Busan City (Mayor Park Hyungjoon) announced that, in cooperation with the Busan Credit Guarantee Foundation, it will release a special fund of 10 billion KRW from the 10th to support import companies and small business owners affected by rising exchange rates amid worsening external economic conditions.
The support targets companies or small business owners who have suffered direct import-related losses and can provide proof of trade transactions within the past six months, as certified by an 'Import Performance Certificate' issued by organizations such as the Korea International Trade Association. Each business can receive up to 100 million KRW, with a five-year loan term (one-year grace period, followed by four years of equal monthly principal repayments), and 2% of the interest rate differential will be subsidized.
The maximum guarantee limit is calculated based on either half of the current year's sales or the highest sales figure from the past six months. The program is expected to be a lifeline for companies with low credit scores that struggle to obtain additional loans, as support is provided regardless of the representative's personal credit rating.
However, loans are restricted for companies that are delinquent, have unpaid taxes, are closed, have property rights issues (such as seizure or provisional seizure), are undergoing credit recovery, personal rehabilitation, bankruptcy, or are registered with credit management information.
Applications are open from the 10th until December 31, or until funds are exhausted or the exchange rate stabilizes (specifically, if the KRW-USD exchange rate falls below 1,300 KRW). Applicants must submit the required documents in person at a Busan Credit Guarantee Foundation or Busan Bank branch.
In preparation for the so-called 'Trump Storm' that is impacting even allied countries, Busan City is actively operating an export crisis support system, including a trade response team and on-site business support teams, to identify challenges faced by businesses and provide tangible support such as subsidies for overseas logistics costs, which companies most desire.
Starting in March of this year, Busan City newly introduced a 'Customs Response Support' category to allow companies affected by customs measures to apply for 'Export-Import Difficulty Vouchers,' and increased the support budget by 50% from 200 million KRW to 300 million KRW compared to the previous year.
Mayor Park Hyungjoon stated, "I hope that the support fund for companies affected by high exchange rates will enhance the competitiveness of importers' raw materials and help reduce the burden on local small and medium-sized enterprises."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
