Yangcheon-gu will offer 2 billion won ($1.39 million) in low-interest loans from its small and medium-sized enterprise development fund to help local businesses weather a prolonged economic downturn.
The move comes amid rising financial strain on small businesses, with the delinquency rate on SME loans hitting an 11-year high. Having already extended 1.9 billion won to 27 businesses in the first half of this year, the district is adding another 2 billion won in loans for the second half.
Manufacturing firms may apply for up to 300 million won, while wholesale and retail businesses and other sectors may apply for up to 80 million won. Loans are repayable over three years in equal installments following a two-year grace period. The annual interest rate of 0.8% — the lowest among Seoul's autonomous districts — is intended to ease the financial burden on local businesses through long-term, low-cost financing.
Eligible applicants must be small and medium-sized enterprises or small business owners with a registered place of business in Yangcheon-gu as of the announcement date (Monday) and must have completed at least six months of business registration, with sufficient collateral under bank lending regulations. Businesses currently repaying a Yangcheon-gu SME development fund loan, or those that completed repayment less than a year ago, are not eligible.
Interested businesses may apply in person at the Employment and Economy Division on the seventh floor of the Yangcheon-gu Office from Monday through Aug. 14, bringing a loan application form, a business plan, and national and local tax payment certificates. Final recipients will be selected through a review by the fund management committee, with loans disbursed through the Woori Bank Yangcheon-gu Office branch starting at the end of September.
In July, the district signed an MOU on special credit guarantee contributions with the Seoul Credit Guarantee Foundation and six financial institutions, committing a total of 2.4 billion won to back approximately 30 billion won in special credit guarantees. That is 16.3 billion won more than last year, and is intended to help local small businesses and self-employed operators with limited collateral access low-interest loans more easily.
"I hope these low-interest loans provide real help to local businesses and small business owners struggling with the economic slowdown and rising prices," Yangcheon-gu District Mayor Lee Gi-jae said. "We will continue to closely monitor businesses' funding needs and operating conditions, and provide tailored support to help the local economy recover and grow."
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