From Interest-Free Loans to Management Support for Small Business Owners
Issuing Local Currency to Boost Consumption and Increase Small Business Sales
Yuseonghun, Mayor of Geumcheon District (center), is meeting with local merchants to listen to their difficulties.
“Thank you. Truly, thank you.”
Gratitude is repeatedly heard over the phone. It is the voice of a small business owner receiving consultation for Geumcheon-gu’s special interest-free loan support for small business owners.
Small business owners are earnestly hoping for support from the district office and public institutions.
Amid the recent economic downturn and high inflation and interest rates threatening the survival of local small business owners, Geumcheon-gu (District Mayor Yu Seong-hoon) is implementing various tangible policies to help small business owners overcome the economic crisis.
On the 27th of last month, the Ministry of SMEs and Startups and the Small Enterprise and Market Service announced the provisional results of the ‘2023 Small Business Survey.’ According to the survey, the operating profit per small business was 25 million KRW, a 19.35% decrease from the previous year (31 million KRW), and sales revenue dropped by 14.91% to 199 million KRW.
The district has prepared multifaceted support measures ranging from financial aid to management stabilization and environmental improvement. Financial support includes ▲ interest-free loan support ▲ Yellow Umbrella Hope Incentive Project, and for management stabilization, ▲ issuance of local currency is promoted. Environmental improvements are supported through ▲ air conditioner cleaning ▲ facility improvement costs, along with additional support such as ▲ road occupancy fee reductions. Furthermore, the ‘Alley Economy Support Center’ operates to integrate dispersed support information from various institutions, making it easier for small business owners to receive the benefits they need.
Geumcheon-style Financial Support to Reduce Economic Burden and Stabilize Management for Small Business Owners
Accordingly, the district is implementing the ‘Geumcheon-style Special Interest-Free Loan Support Project for Small Business Owners’ to reduce their economic burden and support stable management. In October last year, an agreement was signed with the Seoul Credit Guarantee Foundation, Woori Bank, and Hana Bank to provide special credit guarantees and interest-free loans totaling 21.2 billion KRW.
Small business owners can borrow from a minimum of 10 million KRW up to a maximum of 50 million KRW. Geumcheon-gu fully covers the loan interest for one year, and the repayment is structured as equal installments over four years after a one-year grace period. Small business owners who have operated their business for more than six months and whose company representatives have a credit rating of 7 or higher are eligible to apply. Consultations and applications can be made at the Geumcheon branch of the Seoul Credit Guarantee Foundation.
In addition to short-term financial support, long-term support measures for small business owners have also been established. Through the ‘Yellow Umbrella Hope Incentive Support Project,’ small business owners with annual sales under 300 million KRW who subscribe to the Yellow Umbrella Mutual Aid receive up to 120,000 KRW annually, with 10,000 KRW supported monthly for one year. Notably, this can be combined with the 20,000 KRW monthly hope incentive provided by Seoul City, allowing subscribed small business owners to receive up to 360,000 KRW annually.
Management Stabilization Support to Revitalize the Local Economy and Increase Small Business Sales
To stimulate consumption and increase sales for local small business owners, the ‘Geumcheon G-Valley Love Gift Certificate’ and ‘Geumcheon Ttaenggyeoyo Gift Certificate’ are issued. The discount rate for the ‘Geumcheon G-Valley Love Gift Certificate’ was increased from 5% last year to 10% this year (5% immediate discount, 5% rebate), with issuance planned at 16 billion KRW. For the Lunar New Year in January, 9 billion KRW was issued, with an additional 3 billion KRW planned for May and 4 billion KRW for the Chuseok holiday.
The ‘Geumcheon Ttaenggyeoyo Gift Certificate’ was newly issued this year to alleviate the burden on small business owners caused by excessive commissions from major delivery apps. New franchisees receive up to 400,000 KRW in support, and brokerage fees are reduced to 2%, easing the burden on small business owners. It can be used at 1,245 franchise stores registered on the ‘Ttaenggyeoyo’ app, and consumers receive a 15% discount when ordering delivery. Purchases are limited to 100,000 KRW per person per month through the Seoul Pay Plus app.
Improving Small Business Management Environment and Other Support Measures Including Road Occupancy Fee Reduction
Additionally, from this year through 2026, a 25% reduction in road occupancy fees will be implemented for small business owners to alleviate their economic burden. The reduction applies to small business owners who install guide signs or operate business premises on occupied road areas with road occupancy permits for vehicle entry and exit.
Support for improving the management environment of small business owners will also be expanded. To reduce the economic burden on micro small business owners and create a pleasant business environment, the ‘Geumcheon-style Comprehensive Air Conditioner Cleaning Support Project’ will be promoted. It supports comprehensive cleaning of one air conditioner per store for 200 store-type small business owners. Starting in April, customized consulting and facility improvement costs will also be supported for 25 small business stores with more than one year of operation within the district.
Moreover, the district operates the ‘Alley Economy Support Center’ to collect and provide dispersed support information for small business owners from various institutions. It offers assistance through phone and in-person consultations, as well as on-site visits to stores, providing practical help.
Yu Seong-hoon, Mayor of Geumcheon-gu, stated, “We have prepared these various support projects to provide practical help to small business owners who are going through difficult times due to the economic downturn, high inflation, and high interest rates. We will continue to expand diverse customized support so that small business owners can endure these challenging times and focus on their businesses in a more stable environment.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
