This Year, 3.71 Trillion KRW Support to Ease Small Business Management Difficulties... 23.7% Increase Compared to Last Year

Ministry of SMEs and Startups Announces This Year's 'Policy Fund Support Plan'
New 500 Billion KRW Small Business Debt Restructuring Loan Introduced

The government will invest 3.71 trillion won this year to support small business owners struggling with high interest rates. A new refinancing loan for small business owners has also been established. For small and medium-sized enterprises (SMEs), 4.9575 trillion won will be supplied through interest subsidy, direct loans, and youth-exclusive startup funds.

Oh Young-joo, the newly appointed Minister of SMEs and Startups, is delivering her inaugural speech at the inauguration ceremony held on the afternoon of the 2nd at the Government Complex Sejong in Sejong City.
[Photo by Yonhap News]

The Ministry of SMEs and Startups announced on the 4th the ‘2024 SME and Small Business Policy Fund Support Plan’ totaling 8.7 trillion won. The small business policy fund is a loan program aimed at stabilizing management and strengthening the self-reliance of small business owners. The supply scale this year increased by 23.7% from 3 trillion won last year.

First, 1.11 trillion won has been allocated to ease management difficulties for small business owners. Last year, only small business owners with less than 3 years of business experience were supported, but this year anyone can apply regardless of business tenure.

Funds for low-credit and disaster-affected small business owners amount to 1.8 trillion won. In particular, a refinancing loan has been newly established with a scale of 500 billion won. Small business owners who have taken out high-interest loans of 7% or more will be supported to convert them into loans with a 4.5% interest rate, repayable in installments over 10 years.

For small business owners temporarily experiencing management difficulties due to infectious disease outbreaks such as avian influenza and disaster-affected small business owners, 450 billion won will be supplied. The loan limit for disaster recovery support will be raised from the existing 70 million won to 100 million won.

Additionally, 800 billion won will be invested to help small business owners with high growth potential become entrepreneurial small business owners. Support will be provided to those who introduce smart factories, are designated as strong small business owners or local creators, or have increased sales by more than 10% for two consecutive years, with up to 200 million won for working capital and 1 billion won for facility funds.

SME policy funds support promising companies with excellent technological business feasibility but difficulty using private banks by providing long-term loans at lower interest rates than the market. For startups with less than 7 years of business experience, 1.7958 trillion won will be supplied. Among these, youth-exclusive startup funds offering up to 100 million won at a fixed interest rate of 2.5% for startups under 3 years of business experience and founders aged 39 or younger will be expanded from 250 billion won last year to 300 billion won this year.

A total of 2.1424 trillion won is allocated for the growth stage. To help SMEs secure global competitiveness, 100 billion won will be provided to companies with exports under 100,000 USD, and 89.4 billion won in direct loans from the Korea SMEs and Startups Agency along with 228 billion won in interest differential subsidies for commercial bank loans will be provided to companies with exports over 100,000 USD. For growth companies with over 7 years of business experience or those that have introduced smart factories, 1.4587 trillion won in direct loans from the Korea SMEs and Startups Agency and 266.3 billion won in interest differential subsidies for commercial bank loans will be supplied.

For SMEs facing management difficulties, 531.8 billion won will be invested in re-leap support funds. This includes 312.5 billion won for business transformation support, 100 billion won for promoting re-startup after closure, and 119.3 billion won for structural improvement. Additionally, 150 billion won in emergency management stabilization funds will be provided to SMEs across all stages. A new co-growth network loan of 100 billion won will be established to support funds needed for production based on purchase orders after supply contracts.

Meanwhile, the Ministry of SMEs and Startups plans to upgrade the system to assist small business owners and SMEs who have had difficulties using policy funds. During the first quarter, when demand for funds is concentrated, a pre-submission document system will be operated. If documents are submitted in advance before the application period, no documents are required on the application day. Remote support methods for digital vulnerable groups and an offline-only application track have also been prepared. Online pre-diagnosis services to check whether applicants are subject to loan restrictions before applying, and loan management services that notify applicants of screening progress and repayment schedules via chatbot will also be provided.

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