Gwangju Metropolitan City has announced that it will provide 270 billion won in financial support to small and medium-sized enterprises (SMEs) in the region this year. This is an increase of 5 billion won from the 265 billion won provided last year. The city is taking this measure to help SMEs that are struggling financially due to high interest rates and the economic downturn.
The city will provide 190 billion won in the first half of the year as part of its business stabilization fund. Eligible businesses include SMEs with workplaces in Gwangju, manufacturers with a manufacturing rate of 30% or more, manufacturing-related service providers, knowledge industry center builders, and knowledge service providers under the "Gwangju City Small and Medium Business Development Fund Special Account Establishment and Operation Ordinance."
The maximum amount of support per company is 300 million won, and preferential companies, such as PRE·Master Craftsman companies, Excellent Job Creation Companies, Gwangju-type Job Creation Companies, Excellent SMEs, and Excellent Industrial Safety and Health Companies, can receive up to 500 million won.
This year, Gwangju City has temporarily exempted existing borrowers from submitting a loan repayment confirmation letter to ease their burden. It has also expanded the types of manufacturing-related service businesses and allowed a one-time extension of the loan handling period to allow more SMEs to apply.
As a result, businesses in container rental, computer and office machinery rental, architectural technology, engineering, and other scientific and technological services can also apply for business stabilization funds this year.
The loan terms are a two-year grace period with lump-sum repayment, and the city will subsidize 2% of the interest rate difference with city funds to alleviate the difficulties of SMEs, and an additional 1% will be provided to preferential companies.
An additional 1% interest will be provided to companies with a decrease of 10% or more in sales or operating profit. Preferential companies with operating losses will receive up to 4% benefits.
SMEs wishing to apply can apply online through the Gwangju Economic Promotion Agency's financial loan management system and submit related documents. After online document submission and review, applicant companies can receive loans from 13 banks, including Gwangju Bank.
Hong Na-soon, head of the Gwangju City Startup Promotion Division, said, "Considering the economic situation at home and abroad, we have expanded the support scale compared to last year and prepared improvement measures that SMEs can feel. We hope that the business stabilization fund will serve as a catalyst for resolving financial difficulties for local SMEs experiencing difficulties in raising funds and other management issues."
Meanwhile, Gwangju City has been providing business stabilization funds for SMEs worth 200 billion won every year since 2004. Since 2020, the amount of support has been increased to respond to economic situations such as the COVID-19 economic crisis, the three highs (high interest rates, high prices, and high exchange rates), and the court receivership application of Daeyu Winia affiliates.
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