Ministry of SMEs and Startups Expands Support for 'SME Restructuring' in Partnership with Banks

Promotion of Diversified Support and Threshold Easing
Rapid Assistance Including Exemption from Obligation to Establish Restructuring Plans

The Ministry of SMEs and Startups is significantly expanding support for the restructuring of small and medium-sized enterprises (SMEs) in collaboration with private banks.

O Gi-ung, Vice Minister of the Ministry of SMEs and Startups
Photo by Yonhap News Agency

On the 30th, Deputy Minister Oh Gi-woong of the Ministry of SMEs and Startups held an on-site meeting at the conference room of the 63 Building in Yeouido, Seoul, to promote SME restructuring.

This meeting was organized to proactively encourage restructuring amid ongoing concerns about SME management in the face of a global complex crisis. Attendees included SMEs undergoing regrowth and vice presidents from banks (IBK, Kookmin, Shinhan, and Woori).

The Ministry plans to first expand cooperation with the private financial sector this year to strengthen the selection function for companies with growth potential. It aims to diversify support and lower barriers to reduce policy blind spots.

Specifically, a new joint investor support type will be introduced. Utilizing the expertise of private investors such as venture capitalists (VCs), companies with regrowth potential will be identified, and investment and loan funds will be jointly provided to carry out various forms of restructuring.

Support requirements such as mandatory policy fund loan holdings and asset size will be relaxed. Unnecessary conditions will be abolished to focus support on growth potential.

Companies jointly supported by multiple financial institutions will be exempt from the obligation to establish a restructuring plan, shortening the period required for support decisions from at least one month to two weeks. Since multiple experts have recognized the growth potential, the plan is to provide support promptly.

Since 2021, the Ministry of SMEs and Startups has been conducting the ‘Proactive Voluntary Restructuring Program’ together with banks. This program selects companies with growth potential that are experiencing temporary crises and supports them with restructuring plan establishment and restructuring funds. Last year, a total of 17 billion 231 million KRW in new funds was provided to 170 companies, an increase of more than 267% compared to the previous year.

During the subsequent meeting, policy suggestions and requests for expanding cooperation with the banking sector were heard. SMEs requested an increase in support scale and follow-up support for sustainable growth, while banks suggested establishing a system capable of rapid support.

Deputy Minister Oh said, “We will comprehensively review the restructuring support system to prevent companies with innovative capabilities from being left in temporary crises and becoming insolvent. The government will actively support SMEs so that they can quickly recover competitiveness and regrow through proactive restructuring.”

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