Seongnam City to Provide Up to 3% Interest Subsidy on SME Development Funds, Maximum Limit of 500 Million Won

Seongnam City Expands Interest Subsidies and Special Guarantee Support for SMEs
"Relieving the Burden of High Interest Rates" ... 28.4 Billion Won in Loan Support
Special Guarantee of up to 300 Million Won for Companies Lacking Collateral

Seongnam City in Gyeonggi Province (Mayor: Shin Sangjin) is implementing support programs for interest subsidies on SME development funds and special guarantee schemes to ease the financial difficulties of small and medium-sized enterprises (SMEs) facing increased management burdens due to the economic downturn and high interest rates.

Seongnam City Hall exterior view. Provided by Seongnam City

The interest subsidy program for SME development funds allows SMEs to receive working capital loans from partner banks, with Seongnam City covering a portion of the loan interest. This enables companies to access funds at lower interest rates, providing tangible support for business stability. In 2025, the city recommended a total of 28.4 billion won in loans to 94 companies and provided 1.2 billion won in interest support.

Eligible recipients are SMEs with their headquarters or business sites registered in Seongnam City, including: manufacturing companies (with a specialization rate of 30% or higher), venture companies, technology-innovative SMEs, companies in Seongnam’s strategic industries, and businesses confirmed as disaster-affected. The program is open to companies with annual sales under 5 billion won, and for disaster-affected businesses, the sales review is waived. The support period is up to three years, with each company eligible for loans of up to 500 million won.

The interest subsidy rate varies by company type: general companies receive a 2.3% subsidy, preferred companies receive 2.5%, and disaster-affected companies receive 3%. However, companies that have already received loans up to the existing support limit and have not completed repayment as of the application date, as well as those in unhealthy business sectors, luxury or entertainment industries, general construction, or real estate, are excluded from support.

Details on how to apply, partner banks, and required documents can be found in the general announcements section of the public notices on the Seongnam City website.

In addition, Seongnam City operates a special guarantee support program in cooperation with the Gyeonggi Credit Guarantee Foundation for SMEs that have difficulty accessing financing due to a lack of collateral. The program applies relaxed screening criteria and provides credit guarantees of up to 300 million won per company. Companies that receive guarantee certificates can use them to obtain bank loans. Last year, the city supported special guarantees totaling 8.8 billion won for 56 companies.

Any SME located in Seongnam City is eligible to apply, though some business sectors are excluded and must be checked in the announcement. Companies wishing to apply for the special guarantee should consult with the Seongnam branch of the Gyeonggi Credit Guarantee Foundation before submitting an application.

A Seongnam City official stated, "We will actively support SMEs struggling with fund management due to high interest rates and the economic slowdown so that they can regain business stability and continue to grow."