Jungjingong Provides 125 Billion KRW Investment and Loan Support for Promising Growing SMEs

Introduction of New Investment-Conditional Loans and Matching Investment Methods

The Small and Medium Business Corporation announced on the 10th that it will support 125 billion KRW through an investment and loan method according to the '2024 SME Policy Fund Loan Plan.' This year's investment and loan support budget consists of 75 billion KRW for 'growth-sharing loans' and 50 billion KRW for 'investment condition loans.' Among these, the matching investment support scale within the 75 billion KRW growth-sharing loans is 25 billion KRW.

This year, the Corporation newly introduced the 'matching investment' method and the 'investment condition loan' method targeting companies that have received or are scheduled to receive investments from private investment institutions. Growth-sharing loans are an investment method where the Corporation acquires convertible bonds (CB) or redeemable convertible preferred stocks (RCPS) of companies with high growth value and high IPO potential, operating with a limit of 2 billion KRW per company, divided into direct investment and matching investment methods.

Jungjingong

Direct investment is a method where the Corporation directly discovers and supports promising companies, and from this year, support is limited to companies located outside the metropolitan area. Additionally, matching investment is a method where the Corporation supports promising companies that private investment institutions have first invested in, with growth-sharing loans under the same conditions up to a maximum of 1x the private investment amount.

The Corporation also newly introduced the 'investment condition loan' method to alleviate funding difficulties faced by startups struggling to attract follow-up investments after initial investment. This method provides low-interest loans (preferential interest rate of 0.3 percentage points) to companies with high potential for follow-up investment in exchange for a small amount of stock warrants. Eligible companies for investment condition loans are those that have received venture investments of 100 million KRW or more from investment institutions within 12 months prior to the application date. When the Corporation provides loan support, it receives stock warrants equivalent to 5% of the total loan amount, and supported companies must repay 20% of the investment amount upon attracting follow-up investments.

Director Kang Seok-jin stated, “Through diversifying the Corporation’s investment and loan support methods, we will resolve liquidity difficulties of SMEs in the death valley phase and strengthen our role as a catalyst for venture investment to enable scale-up into mid-sized companies.”

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