Daejeon, South Korea – Daejeon City announced on January 9th that it will be providing 310 billion won in funding to support small and medium-sized enterprises (SMEs) this year. The funding will be available starting January 9th, and businesses can apply according to the guidelines.   

The Small and Medium-Sized Enterprise Support Fund is designed to ease the financial burden on local SMEs and enable them to focus on investments in facilities, technology, and other business activities. The fund provides interest rate subsidies or low-interest loans.   

Of the total 310 billion won, 160 billion won will be allocated in the first half of the year. The funds will be distributed as follows: 600 billion won each for management stabilization funds and regional specialized partnership guarantees, 250 billion won for startup and competitiveness enhancement funds, and 150 billion won for purchase-order-based production support funds. These funds will provide interest rate subsidies and low-interest loans, easing the financial burden on SMEs.   

The Small and Medium-Sized Enterprise Support Fund is divided into four categories:

Management Stabilization Fund (100 billion won): Provides funding for operational expenses such as salaries and administrative costs.
Regional Specialized Partnership Guarantee (100 billion won): Supports the growth of regional specialized industries.
Startup and Competitiveness Enhancement Fund (500 billion won): Provides funding for land purchases and facility investments.   

Purchase-Order-Based Production Support Fund (600 billion won): Provides low-interest loans for purchasing parts and raw materials to support product production.   

For the “Management Stabilization Fund”, “Startup and Competitiveness Enhancement Fund”, and “Regional Specialized Partnership Guarantee”, if a company enters into an agreement with a bank designated by Daejeon City, the bank will subsidize a portion of the interest rate on the loan. The subsidy amount will be equivalent to 1.5% to 3% of the loan amount, depending on the requirements.   

The “Purchase-Order-Based Production Support Fund” provides low-interest loans to local SMEs that have secured domestic or international supply contracts.   

Compared to last year, there are several changes to the Small and Medium-Sized Enterprise Support Fund this year. The support limit for the management stabilization fund has been reduced from 5 billion won to 3 billion won to benefit more companies. Additionally, the interest rate for the startup and competitiveness enhancement fund has been lowered from 6% to 5%, and the company's burden has been reduced from 3% to 2-3%. Furthermore, companies participating in Daejeon City's demonstration projects and local companies with over 20 years of operation are now eligible for preferential interest rates.   

With the newly established regional specialized partnership guarantee, SMEs with weak collateral can more easily secure loans under favorable conditions through credit guarantees from the Credit Guarantee Fund and designated banks.

Applications for the Small and Medium-Sized Enterprise Support Fund can be made through the Daejeon Biz portal (http://www.djbea.or.kr), the SME support portal operated by the Daejeon Job and Economy Promotion Agency.

"We hope that this support will greatly benefit local SMEs as they prepare for the Lunar New Year," said Choi Won-hyeok, director of the Enterprise Support Division at Daejeon City. "Daejeon City will continue to provide various support measures to promote mutual growth with SMEs."

[Copyright (c) Global Economic Times. All Rights Reserved.]