Chuncheon City Doubles Financial Support for SMEs and Small Business Owners

SME Development Fund Increased to 40 Billion Won, Special Guarantee Expanded to 7.5 Billion Won
Interest Subsidies and Credit Guarantees Enhanced
Support Available Until This Year's Budget Is Exhausted

On April 18, Chuncheon City, Gangwon Special Self-Governing Province (Mayor Yuk Donghan), announced that it will significantly expand financial support for small and medium-sized enterprises (SMEs) and small business owners in response to the prolonged economic downturn and worsening liquidity crisis.

Chuncheon City Hall exterior. Photo by Chuncheon City Hall

This year, Chuncheon City will increase the loan amount for the SME Development Fund from 20 billion won to 40 billion won, and expand the scale of special guarantee support from 3 billion won to 7.5 billion won, accepting applications accordingly.

The SME Development Fund subsidizes 2 to 3 percent of the interest on working capital and facility loans. SMEs can receive support of up to 500 million won, while small business owners can receive up to 50 million won.

The special guarantee targets businesses that lack sales or have a short business history and are therefore vulnerable in credit evaluations. The guarantee is provided up to 100 million won for SMEs and up to 50 million won for small business owners.

In the first quarter of this year, Chuncheon City recommended loans totaling 15.3 billion won to 279 companies and provided special guarantees to about 95 percent of applicants. The program will continue until funds are exhausted, with support available for up to four years. However, businesses in luxury or entertainment sectors are excluded from eligibility.

To apply for loans, applicants must first consult with one of the 25 partner financial institutions and then submit their application to the Business Support Division at City Hall. Applications for the special guarantee can be made through the Gangwon Credit Guarantee Foundation.

A Chuncheon City official stated, "Due to the prolonged economic downturn, many SMEs and small business owners are struggling to secure funding. We hope that this expanded financial support will provide practical help to local businesses, and we will continue to implement various policies to support the recovery of the regional economy."

Further details can be found in the announcement on the City Hall website.