Want 10 million won? Get in line!

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Want 10 million won? Get in line!


Small business owners and self-employed people line up to apply for loans at the Daegu center of the Small Enterprise and Market Service on Wednesday.[NEWS1]

If you’re a small business owner hoping to borrow 10 million won ($8,245) from the government to get you through the coronavirus crisis, you may be out of business before you get the money.

The good news is that the funding, which comes from the Small Enterprise and Market Service (Semas) fund, will be disbursed in an orderly fashion. Owners born in even years can apply on even days. Those born during odd years can apply on odd days.

These rules were announced by the Ministry of Economy and Finance and the Ministry of SMEs and Startups on Friday.

A whole host of measures to support small businesses and the self-employed suffering in the coronavirus economy are being rolled out by the government. The problem has been getting money to businesses.

Thus, the odd-day, even-day solution.

“This new measure is expected to help solve the bottleneck in applying procedures,” Korea Federation of Micro Enterprise said. “In addition, we hope to see more direct support from each local government such as tax breaks and emergency relief.”

As with many ideas that seem good on paper, the system that was devised has not worked so well in reality. For some this is causing economic collapse in real time.

For small business running on empty, even the slightest of delays or the smallest hurdles can be the difference between making it and packing it in.

“I went to Seoul Central Center of Semas in Jongno District, central Seoul, in the morning and they told me to come back in the afternoon, making me close the restaurant for the whole day,” Kim Hyung-soon, who runs a Korean restaurant in Jung District, central Seoul, said. “I wish I could apply through the district office.”

“Monthly rent is the biggest burden,” she added. “There is a need for a campaign for voluntary reduction of rent by the building owners. Electricity and city gas costs also need to be lowered.”

“I’m glad that the loans are now available at commercial banks, but there are so many people waiting that I doubt how much congestion will be solved by this new measure,” said Uhm Hae-sung, a chairman of the Korea Federation of Micro Enterprise Dongjak branch. “Since there are so many new measures flooding out, many are not fully aware of the new changes. We also need a detailed explanation of the new policy.”

Frustration being the mother of invention, some small businesses are suggesting ways to better disburse the much-needed funds.

“Many merchants go to the Semas office as early as 6 a.m. but go back to run their businesses again without filing documents because of the long waiting line,” Lee Chung-hwan, the head of an association of Motgol Market merchants, said. “In the case of a crowded commercial building or a market, I hope to have a temporary office at the site where we can easily apply for loans.”

“There are cases where merchants in urgent need of money visit loan business because even though the interest rate is high, they can get the fund as soon as they apply,” he added.

The Ministry of SMEs and Startups is also working on various policy alternatives. The government is considering sending tax accountants and managers who are under the Ministry of SMEs and Startups on-site to help business owners prepare loan applications.

“Many small business owners are not familiar with financial instruments online,” said Kim Joong-hyun, the Ministry of SMEs and Startups spokesman, said. “So we will strengthen our offline services.”

The government also plans to introduce a civil document issuing machine so that documents can be issued right away on-site.

“Small business owners will now be able to complete applications and return to their jobs as soon as possible through reserved phone calls and KakaoTalk counseling services,” Kim said.

The government will also simplify the required documents for loan service. Only a business registration certificate, lease contract and a bankbook copy are now required.

BY KIM YOUNG-JOO, LEE SO-A AND KANG KI-HUN [kim.yeonah@joongang.co.kr]
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