Launch of 3.3 Trillion Won "Small Business Growth Promotion Guaranteed Loan"
Sequential Rollout by Banks Starting November 17
The Financial Services Commission announced on November 16 that the "Small Business Growth Promotion Guaranteed Loan," which provides competitiveness enhancement funds to support the growth of small business owners, will be launched sequentially by each bank starting November 17.
The Small Business Growth Promotion Guaranteed Loan is a win-win guarantee and loan program based on the bank-customized small business support measures announced in December last year. It provides guaranteed loans of up to 100 million won (up to 50 million won for sole proprietors), with a maximum 10-year installment repayment period (up to a 3-year grace period), to small business owners who can demonstrate plans to enhance competitiveness, such as increasing sales.
Banks will contribute a total of 300 billion won over three years to the Korea Federation of Credit Guarantee Foundations (regional credit guarantee foundations), and based on this, a total of 3.3 trillion won in guaranteed loans will be provided. The growth promotion guaranteed loan will be processed through a delegated guarantee method between banks and regional credit guarantee foundations. Funds will be provided to small business owners who can demonstrate competitiveness, supporting their growth.
Since the delegated guarantee allows banks to review and issue guarantee certificates, small business owners do not need to visit regional credit guarantee foundations to obtain the certificate. The government emphasized that this enables small business owners to conveniently and quickly receive guaranteed loans through a one-stop process at the bank.
The growth promotion guaranteed loan provides "competitiveness enhancement funds" to small business owners who are currently operating a business, have a credit score of 710 or higher, have been in business for at least one year, and can demonstrate certain competitiveness enhancement requirements such as increased profitability or sales. Eligible applicants include small business owners who can prove their competitiveness enhancement plans by submitting records of adopting smart technologies such as kiosks or by showing an increase in the number of employees. Small business owners who have received consulting that meets certain requirements from regional credit guarantee foundations, the Small Enterprise and Market Service, or local governments for their business operations are also eligible to apply.
On November 17, eight banks-NongHyup, Shinhan, Woori, KB Kookmin, IBK, Standard Chartered, Suhyup, and Jeju-will launch the product first, followed by six banks-Hana, IM, Busan, Gwangju, Jeonbuk, and Gyeongnam-on November 28. Three internet banks-Kakao, Toss, and K Bank-which must implement the entire process non-face-to-face, are scheduled to launch early next year.
Meanwhile, the Financial Services Commission also announced that the "Small Business The Dream Package," launched on September 4, is being rolled out sequentially. The Small Business The Dream Package is a product that supplies special funds totaling 10 trillion won to small business owners with a good repayment record, tailored to their circumstances such as startup, growth, or management difficulties.
After the announcement of the measures, each product has been launched sequentially following a preparation period. On November 7, the final two products-IBK's "Small Business Value Growth Loan" (1.5 trillion won) and "Neighborhood Small Business Vitality Loan" (1 trillion won)-were launched.
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