Gyeonggi Credit Guarantee Foundation (GCCF)’s ‘Debt Repayment Extension Special Guarantee for Small Business Owners with Medium-Low Credit’ Receives Positive Response
[Herald Economy (Suwon) = Reporter Park Jung-kyu] Gyeonggi Credit Guarantee Foundation (Chairperson Si Seok-jung) has seen tangible results from its policy aimed at alleviating the economic burdens on small business owners struggling due to domestic economic downturns and prolonged high-interest rates. On the 16th, GCCF announced that the ‘Debt Repayment Extension Special Guarantee for Small Business Owners with Medium-Low Credit’—part of Gyeonggi Province’s ‘Livelihood Recovery Let’s Go! Small Business Owners Revive Go! Project’—has received a positive response from small business owners.
This special guarantee, launched after the end of COVID-19 special support, provides relief through extending principal repayment periods and reducing interest burdens via interest subsidies, focusing on supporting a smooth landing for businesses. Amid ongoing financial strain from high-interest rates and inflation, along with reduced sales due to economic recession, Gyeonggi Province decided, following Governor Kim Dong-yeon’s philosophy that timely support during tough times is vital, to proactively address small business owners’ growing debts and rising default rates.
In collaboration with GCCF, Gyeonggi Province has launched the largest refinancing product yet, operational since September 30. This special guarantee was implemented after discussions with GCCF’s customer advisory committee, considering feedback from the ground regarding difficulties caused by high-interest rates, and supports small business owners by reducing their financial burdens and aiding stable loan repayments.
The support scale for this special guarantee is 300 billion KRW, with 6,370 applications amounting to 100 billion KRW received in just nine business days as of the 15th. The rapid influx of applications suggests the total support might be exhausted within a month.
Gyeonggi’s support of a 1% guarantee fee and a 2% loan interest rate subsidy has been praised for significantly cutting small business owners’ financial costs. Moreover, GCCF’s ‘Easy One’ mobile app offers a convenient application process without visits or paperwork, allowing for existing loans to be refinanced into long-term low-interest loans within 3-4 days, drawing significant attention from small business owners.
The special guarantee is available to small business owners using a GCCF guarantee with a credit score of 839 or below. Each business can receive up to 100 million KRW in support, with KB Kookmin Bank, IBK Industrial Bank, NH Nonghyup Bank, Shinhan Bank, Woori Bank, SC First Bank, and Hana Bank participating as lenders.
Refinancing converts existing loans to defer principal repayment for three years, followed by monthly installments over the next three years (3-year deferment, 3-year installment repayment). Furthermore, Gyeonggi Province will support financial costs totaling 3%—including a 1% guarantee fee and a 2% interest subsidy—over six years. However, businesses in a poor financial state with GCCF, those applying for restart funds, or those that have closed, suspended, or relocated operations outside Gyeonggi are excluded from support.
Chairman Si Seok-jung stated, “The rapid exhaustion of our ‘Special Guarantee for Medium-Low Credit Small Business Owners’ shows the severe difficulties small business owners in the province are facing.” He added, “We feel a strong sense of responsibility and duty in offering a ‘new opportunity’ for small business owners to overcome crises and achieve a smooth landing.” He further emphasized that GCCF, in cooperation with Gyeonggi Province, will continue to provide fast and systematic tailored financial support to ensure the sustainability and success of small businesses.