"No Collateral Needed" Buk-gu Launches 5.81 Billion Won Special Guarantee for Small Businesses

Priority Support for Merchants Affected by Subway Construction
Benefits Expanded to All Small Business Owners

Gwangju Buk-gu signed a memorandum of understanding with 18 financial institutions on the 24th to promote the "3-No Special Guarantee" program for small business owners. Photo courtesy of Gwangju Buk-gu

Gwangju Buk-gu has begun in earnest to roll out the "Three-No Special Guarantee" program, which offers loans with no collateral, no interest burden, and no guarantee fees, to support local small business owners struggling with funding shortages.

Gwangju Metropolitan City Buk-gu announced that on the morning of the 24th, it signed financial business agreements with 18 financial institutions in the Buk-gu Office situation room and will implement the "Three-No Special Guarantee for Small Business Owners" program.

Under this program, small business owners can receive loans of up to 20 million won (30 million won for those restarting a business). Buk-gu will fully cover, for one year, the entire amount of interest up to 5.3% without any collateral, as well as one year of guarantee fees equivalent to 0.7% of the loan principal.

The total guarantee amount for this year is 5.81 billion won, an increase of about 11% from last year’s 5.27 billion won. In particular, the scope of beneficiaries has been significantly expanded from only existing tenant small business owners to all small business owners, thereby broadening the range of benefits.

In addition, Buk-gu plans to allocate 1 billion won as a priority to support nearby merchants who have unavoidably suffered losses due to the prolonged construction of Subway Line 2, in order to give them some breathing room.

Applications for the special guarantee can be submitted through the Gwangju Credit Guarantee Foundation starting from March 3 and will be accepted until all funds are exhausted.

Alongside this, Buk-gu will also operate the "Inclusive Finance Interest Subsidy Program" (supporting 5% interest for one year) for low-income and low-credit small business owners who have difficulty accessing institutional loans, with the aim of establishing a dense financial support network.

An official from Buk-gu said, "We hope this will at least somewhat ease the burden on small business owners who are feeling helpless due to the prolonged economic downturn," adding, "We will continue to pursue support policies that revitalize neighborhood economies and strengthen the foundation for small business owners to stand on their own feet."