DAEJEON — The Daejeon Credit Guarantee Foundation said on the 13th that it has begun offering preferential guarantees to borrowers who have faithfully repaid their obligations, in partnership with Hana Bank.
The program is designed to return tangible benefits to small business owners who used the foundation's guarantees as agreed and repaid them in full.
Eligible applicants are businesses that operate normally with a place of business in Daejeon as of the date of the guarantee application, have fully repaid at least one guarantee extended by the foundation and had it terminated, hold no overdue loans, and have no record of arrears of 10 days or more within the past three months.
The foundation has also broadened eligibility, extending coverage beyond its previous focus on small business owners to include young founders and growth companies.
Hana Bank contributed 1 billion won ($690,000) to the foundation to enable 13.9 billion won ($9.6 million) in guarantees. Loans are capped at 70 million won per business, with a two-year grace period and lump-sum repayment, and are linked to a Daejeon city interest subsidy program to lower borrowing costs.
Daejeon will cover 2.7% of the interest for two years through an interest subsidy, and combined with Hana Bank's agreed rate, loans will carry an effective rate in the mid-2% range.
"We will continue to expand the scope of support and our product lineup so that more local companies, including young founders and growth firms, can feel the benefits," said Lim Jung-yeon, a director general at the Daejeon Credit Guarantee Foundation.