June 2024 Policy Overview: Strengthening Financial Support for Small Businesses and the Self-Employed
In June 2024, the Korean government officially announced a policy to strengthen financial support for small businesses and self-employed individuals.
The policy aims to alleviate business pressures, improve loan accessibility, and ensure financial stability. Key measures include expanded low-interest loans, enhanced guarantees, and emergency working capital support.
This article provides a detailed overview of the policy’s background, key components, application procedures, expected economic impact, and frequently asked questions.
Table of Contents
- Policy Background and Necessity
- Key Financial Support Measures
- Application Process
- Expected Economic Impact
- FAQ
- References and Resources
Policy Background and Necessity
- Announcement Date: June 15, 2024
- Responsible Agencies: Ministry of SMEs and Startups, Financial Services Commission, Korea Credit Guarantee Fund, Technology Credit Guarantee Fund
- Main Objectives:
- Provide financial stability support for small businesses and self-employed individuals recovering from COVID-19 impacts
- Mitigate operational risks caused by rising interest rates and raw material costs
- Expand access to loans for small business owners with limited financing options
Recent statistics indicate that approximately 30% of small businesses and self-employed individuals face difficulties in securing funds, and high-interest burdens are intensifying operational pressures. The government aims to create a stable business environment through direct financial support and guarantee expansions.
Key Financial Support Measures
| Support Item | Description |
|---|---|
| Expanded Low-Interest Loans | New loan products with interest rates 1–2% lower than standard rates, up to KRW 50 million |
| Enhanced Guarantee Support | Increased credit guarantees through the Korea Credit Guarantee Fund and Technology Credit Guarantee Fund to improve loan approval rates |
| Emergency Working Capital Support | Short-term liquidity assistance for businesses in crisis, with fast-track review and disbursement |
| Loan Repayment Deferral | Option to defer existing loan repayments to ease financial pressure |
| Consulting and Financial Services | Linked services including financial consulting, tax support, and business stabilization programs |
Application Process
- Online Application: Access the official portals of the Ministry of SMEs and Startups or participating financial institutions
- Offline Application: Visit local branches of the Korea Credit Guarantee Fund or Technology Credit Guarantee Fund
- Required Documents: Business registration certificate, recent financial statements, application form, and ID
- Review Process: Credit evaluation and business status assessment, followed by loan approval and fund disbursement
Expected Economic Impact
- Business Stability: Enhanced continuity and operational stability for small businesses and self-employed individuals
- Financial Relief: Lower debt burden enables reinvestment and employment maintenance
- Consumer Spending: Increased liquidity can stimulate local economic activity
- Crisis Resilience: Strengthened ability to respond to unforeseen economic shocks
FAQ
Q1. Who is eligible for this policy?
The main targets are small businesses, self-employed individuals, and early-stage startups.
Q2. What are the loan and support limits?
Low-interest loans can reach up to KRW 50 million, and guarantee limits are determined per company after review.
Q3. How long does it take to receive support after application?
Emergency working capital can be provided within 3–7 days, while standard loans may take 1–2 weeks for approval and disbursement.
References and Resources
- Ministry of SMEs and Startups: Financial Support Policy
- Korea Credit Guarantee Fund: Support Programs
- Technology Credit Guarantee Fund: Financial Assistance