Seoul City Launches 'Safe Account 2' for Self-Employed... Additional Support of 200 Billion Won

[Financial News] With the number of individual and corporate businesses that reported closure last year surpassing 1 million, Seoul City is stepping in for emergency liquidity support. Following the rapid exhaustion of 'Safe Account 1', the new 'Safe Account 2' has significantly improved loan conditions, including expanding partner banks and preferential treatment for vulnerable self-employed individuals.
Seoul City announced on the 18th that it will supply the second 'Safe Account', a negative account dedicated to livelihood self-employed individuals, on the 28th with a scale of 200 billion won.
The 'Safe Account' is a negative account exclusively for self-employed individuals, first launched nationwide last March, to prevent them from being driven to illegal private finance due to difficulties in obtaining institutional financial loans. It allows free withdrawal and repayment within a limit of 10 million won, receiving great response from self-employed individuals in need of urgent funds. The first account was fully exhausted in 58 business days, and 8 local governments, including Incheon and Daejeon, are also benchmarking it.
In particular, the second 'Safe Account' is considered a core project of the 'Small Business Support Project' in the second half of the year. Compared to the first account, the number of partner banks has increased from 1 to 4, and new preferential conditions have been established for vulnerable groups such as young entrepreneurs and long-established business owners.
According to the 'Seoul City Self-Employed Financial Status Survey' conducted by the Seoul Credit Guarantee Foundation on 250,000 small businesses and small business owners using Seoul Credit Guarantee, the rate of increase in multiple debts among young small business owners with less than 3 years of business was 17.5%, the highest among all age groups. Also, for small business owners over 60 years old who have been operating for more than 10 years, the ratio of loans held to annual sales was 79.6%, indicating they are in financial difficulties.
The city explained, "In 'Safe Account 2', we decided to relax support conditions or guarantee criteria for 'vulnerable self-employed' such as young entrepreneurs and long-established business owners."
The Safe Account can be applied for by individual business owners who have been in business for more than 1 year, have a total sales of more than 2 million won in the last 3 months, or have reported sales of more than 10 million won in 1 year, and have a NICE personal credit score of 600 or higher.
If, on the application date, you have received credit card cash services from 4 or more institutions, or if the total amount received exceeds 10 million won, or if you have borrowed from 3 or more institutions established under the 'Credit Finance Business Act' and 'Mutual Savings Banks Act' within the last 3 months, or if the total amount of the existing foundation's guarantee balance and Safe Account support amount exceeds 100 million won, support is restricted. Also, those with a history of support from Safe Account 1 cannot apply for 2.
However, young entrepreneurs under 30 years old who have been in business for less than 3 years can apply if they have been in business for more than 6 months, even if they have not been in business for 1 year. Business owners over 60 years old who have been in business for more than 10 years can apply even if they use 4 or more institutions in the second financial sector, such as card loans and cash services.
Lee Haeseon, Director of the Seoul City Civil Affairs and Labor Bureau, said, “As Safe Account 1 was fully exhausted in a short period, we have significantly improved the support conditions for this fund, reflecting the high demand from livelihood self-employed individuals,” and added, “Seoul City will continue to pursue practical financial support policies that small businesses can feel.”

chlee1@fnnews.com Lee Changhoon Reporter