Songpa-gu District Mayor Seo Gang-seok. [Provided by Songpa-gu]
Songpa-gu District Mayor Seo Gang-seok. [Provided by Songpa-gu]

Songpa-gu in Seoul launched a second round of special credit guarantees worth 20 billion won ($14.1 million) as of Monday to help small businesses and self-employed entrepreneurs struggling with cash flow.

The district is following up its first-half program — also worth 20 billion won — with an additional 20 billion won in the second half, bringing this year's total to 40 billion won, the largest amount the district has ever committed to the program. The initiative helps local small businesses and sole proprietors that lack collateral secure low-interest loans through guarantees issued by the Seoul Credit Guarantee Foundation.

The second round also lowers the bar for applicants. Previously, only businesses that had operated continuously in Songpa-gu for at least six months were eligible. That requirement has been scrapped, allowing newly registered startups to apply immediately after obtaining their business registration.

The number of partner financial institutions has also grown. Hana Bank and Shinhan Bank, which participated in the first round, have been joined by KB Kookmin Bank, a saemaul credit cooperative and Kakao Bank, bringing the total to five institutions.

Eligibility is open to small businesses and sole proprietors registered in Songpa-gu. However, those with outstanding national or local tax arrears, those listed in credit-risk databases, or businesses in restricted industries are excluded.

The guarantee ceiling is 50 million won per business. The guarantee fee is 0.8 percent per year for new applicants and 1.0 percent for those seeking additional support, with lending rates tied to a three-month floating rate. Repayment terms allow for a one-year grace period followed by four years of equal installments.

After applying, businesses undergo a credit review by the Seoul Credit Guarantee Foundation. Once a guarantee certificate is issued, the loan is disbursed through one of the partner financial institutions. Final eligibility and loan amounts are determined through the review process.

"Timely support when it is needed most — that is what public administration should deliver," District Mayor Seo Gang-seok said. "By expanding this year's special credit guarantee program to a record 40 billion won and removing the operating-history requirement, we aim to provide real, practical help to small business owners, including those just starting out."

Songpa-gu ran a 20 billion won unsecured special credit guarantee program in 2024 and a 22.5 billion won program in 2025.


cook@heraldcorp.com