282 billion won fund covers new operating loans and high-rate debt refinancing; priority given to businesses hit by sales slumps, high interest burdens, store closures and disasters
Daejeon city is rushing out an ultra-low-interest emergency fund to ease the financial burden on local small business owners and self-employed workers struggling with weakening consumer sentiment, falling sales and prolonged high interest rates.
The city announced Tuesday it would supply 282 billion won ($192 million) in what it calls a "Daejeon-style ultra-low-rate special fund," revamping its existing support framework to get money to crisis-hit small businesses more quickly.
The fund is divided into two components: 82 billion won in new operating loans to cover expenses such as rent, labor and raw materials, and 200 billion won in refinancing loans to convert existing high-rate debt into lower-rate, guarantee-backed loans.
The city said it plans to go beyond simply expanding the guarantee supply, running the program in a way that prioritizes small businesses most urgently in need of financial support.
Priority recipients include businesses that have seen sharp drops in sales or are carrying heavy high-rate loan burdens, tenants harmed by the closure of large retail stores, businesses struggling to operate due to fires or other disasters, and small business owners at risk of shutting down due to temporary cash shortfalls.
Working with the Daejeon Credit Guarantee Foundation, the city will offer dedicated consultations and expedited reviews for crisis-affected businesses, then connect each applicant to either new operating loans or refinancing loans based on their individual circumstances.
The guarantee limit is up to 70 million won per business. General applications open on the first business day of each month at 10 a.m. through the Daejeon Credit Guarantee Foundation's website. A separate consultation and application channel will be set up for crisis-hit businesses so they are not shut out by the monthly rush.
Of the second-half special fund, 4.9 billion won in new operating loans and 120.4 billion won in refinancing loans have been approved so far, with actual disbursements reaching 3.3 billion won and 100.6 billion won, respectively.
Tenants affected by Homeplus store closures will also be prioritized for refinancing loans, and the city said support will extend beyond financing to include business diagnostics and consulting tailored to each company's situation — covering business restructuring, recovery planning and sales channel development.
For businesses hit by disasters such as the factory fire in Daedeok-gu, the city is linking ultra-low-rate special funds to the results of on-site damage investigations, with guarantee support of 760 million won currently underway.
Throughout the second half of the year, the city said it will continuously monitor the entire process — from application and consultation through review, guarantee issuance and loan disbursement — and strengthen cooperation with the Daejeon Credit Guarantee Foundation and partner financial institutions to ensure small businesses receive support when they need it.
Moon In-hwan, the city's director of economic affairs, said what matters is not the total size of the support but how quickly the right amount reaches each business that needs it. "We will proactively seek out small business owners in crisis — whether from falling sales, high interest rates, disasters or store closures — and provide both financial support and business recovery assistance," he said.
kwonhl@heraldcorp.com
