OSAN — The city of Osan has secured an additional 200 million won in contributions for special loan guarantees for small business owners despite strained finances. The city said it prioritized livelihood spending to help local merchants struggling with tight funding amid high interest rates and a slowing economy.
Osan said on the 9th that it had included 200 million won in special guarantee contributions in its third supplementary budget and completed approval by the city council. The move clears the way for the city to resume guarantee support, which stopped in early July after the original funds ran out.
The city had allocated 600 million won in its main budget for the year, the same amount as a year earlier. But with high prices, high interest rates and weak consumption persisting, the number of small business owners needing operating funds rose sharply. The budget was fully exhausted by early July.
Even after the contributions ran dry, inquiries seeking a resumption of support continued to come in. For business owners short on collateral or credit, the special guarantee is a key channel for obtaining bank loans. It has effectively served as a lifeline for merchants who must cover operating costs, rent and wages.
Mayor Cho Yong-ho, after being briefed on the situation, ordered officials to find ways to narrow the gap in support. At the time, Osan was conducting a broad review of existing programs to cope with a shortage of revenue. The city restructured spending by scaling back projects with low feasibility or urgency while protecting budgets tied directly to residents' daily lives.
The additional contribution was made under the same budget policy. To use limited resources efficiently, the city reset priorities among programs and gave precedence to spending needed for local economic recovery and household stability.
The special guarantee program supports small business owners who have difficulty borrowing from financial institutions because of insufficient credit or collateral. Osan contributes funds to the Gyeonggi Credit Guarantee Foundation, which reviews applications and issues guarantee certificates. Business owners can then use the certificates to borrow operating funds from financial institutions.
The additional 200 million won will be used as loan guarantee funding through the Gyeonggi Credit Guarantee Foundation. The city expects the measure to ease the burden on business owners under financial pressure and help stabilize operations in neighborhood commercial districts.
"Fiscal conditions are difficult, but we cannot halt support even for the areas that need it most," Cho said. "We secured funding for the special guarantees first so that small business owners can weather the crisis."
"I hope this additional contribution gives small business owners struggling with funding the strength to get back on their feet," the mayor added. "We will continue to direct the budget first to where residents' lives and the local economy need it."
