50 SMEs Facing Management Difficulties Receive 25 Billion Won in 'Proactive Structural Improvement' Funding

Financial Support for Crisis-Stricken SMEs through Cooperation with Financial Institutions: New Funds, Maturity Extensions, and Structural Improvement Plan Establishment

[Asia Economy Reporter Kim Jong-hwa] Company A, which manufactures bus window frames and flooring materials, faced a liquidity crisis due to a sharp decline in sales caused by labor-management issues with its main clients and the relocation of production bases overseas. However, last year, it escaped the crisis through self-help efforts by diversifying its product lines and clients, including producing parts for electric buses, supported by a KRW 200 million proactive restructuring fund from the Ministry of SMEs and Startups. This year, it is expected to achieve sales of KRW 2.5 billion, with orders for parts for 200 electric buses scheduled.

The Ministry of SMEs and Startups (Minister Kwon Chil-seung) announced on the 18th that it will officially launch the 'Proactive Restructuring Program' from the 22nd to support the business normalization of small and medium enterprises (SMEs) like Company A, which are facing liquidity crises due to prolonged COVID-19 and ongoing economic recession.

The 'Proactive Restructuring Program' is a project that supports management crisis SMEs by linking the Small and Medium Business Corporation and partner banks (such as Industrial Bank of Korea) to provide up to 90% of the costs for establishing restructuring plans and new funds.

The program targets SMEs that have been incorporated for more than three years and have a total credit exposure of less than KRW 10 billion. In the second half of last year, through a pilot operation (targeting 10 companies), it jointly supported 15 companies with KRW 5.5 billion in funds, including new liquidity supply, maturity extensions, and interest rate reductions, in cooperation with Industrial Bank of Korea.

This year, the funding scale will be increased to KRW 25 billion, and restructuring plan establishment and new funds will be linked and supported for about 50 SMEs experiencing management crises.

Based on the pilot operation results, the scope of partner banks and regional collaborative accounting firms will be expanded, and diversification of support methods will be promoted by discovering new financial support measures to enhance the effectiveness of restructuring support.

SMEs wishing to participate can apply for consultation through the 18 Small and Medium Business Corporation Rechallenge Comprehensive Support Centers nationwide.

This content was produced with the assistance of AI translation services.