One-Stop Financial Support for Business Restructuring Companies... Fund of 75 Billion Won Established

[Asia Economy Sejong=Reporter Dongwoo Lee] The Ministry of Trade, Industry and Energy (MOTIE) is launching a one-stop financial support service for business restructuring companies in collaboration with the Financial Services Commission (FSC). They are jointly establishing a 75 billion KRW Business Restructuring Innovation Fund and plan to complete the fund formation and select the first investment companies in the second half of this year.

On the 3rd, MOTIE and FSC held the 1st Business Restructuring-Policy Finance Linkage Strategy Meeting at the Korea Chamber of Commerce and Industry in Seoul, where they finalized plans to strengthen financial support.

Going forward, the business restructuring review process and policy finance loan procedures will be linked to provide prompt financial support guidance. This is expected to resolve the difficulty of having to visit each policy finance institution individually to confirm the availability of financial support even after receiving approval for a business restructuring plan.

During the business restructuring review process, a Technology Credit Evaluation (TCB) will be conducted, and companies that pass the evaluation criteria will be guided to policy finance institution support programs simultaneously with the approval of their business restructuring plans. This will be piloted starting from the 35th Business Restructuring Plan Review Committee scheduled for the end of next month and will be fully expanded from next year.

A Business Restructuring Comprehensive Support Center will also be launched. Unlike before, when discovering business restructuring companies was done through recommendations from industry associations or individual company applications, the Comprehensive Support Center will now also play a role in recommending the use of this system to companies that may need restructuring. Policy finance institutions will support companies approved for business restructuring in easily obtaining Technology Credit Evaluations (TCB) within the center and will provide guidance on policy finance programs.

Financial programs targeting companies approved for business restructuring will also be operated. The two ministries are jointly establishing a 75 billion KRW Business Restructuring Innovation Fund and plan to complete the fund formation and select the first investment companies in the second half of this year. Korea Growth Finance, established by policy finance institutions in 2016, and the Korea Institute for Advancement of Technology under MOTIE will each invest 18 billion KRW and 7 billion KRW respectively. The government also plans to supply liquidity to business restructuring approved companies through credit guarantee support for P-CBO by the Korea Credit Guarantee Fund and expansion of the Sale and Leaseback (S&LB) business by the Korea Asset Management Corporation.

Jang Young-jin, Vice Minister of MOTIE, said, "The business restructuring system, which started in 2016, has become an effective support system responding to changes in business activities, approving and supporting 108 companies last year," adding, "With the addition of this policy finance support and the launch of the Business Restructuring Comprehensive Support Center, we expect the business restructuring system to become a foundation for the continuous growth and development of small and medium-sized enterprises and mid-sized companies."

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