4.2 Trillion Won Policy Finance: Enhanced Support for SMEs and Small Business Owners

The Ministry of SMEs and Startups (MSS) will inject a total of 30.7 trillion won in policy finance, including 4.2 trillion won from the first supplementary budget for 2025, to serve as a strong support for SMEs and micro-enterprises amidst internal and external uncertainties. This fund, added to this year's main budget of 26.5 trillion won, focuses on boosting economic vitality. There are two key areas. First, 1.7 trillion won in funds for SMEs to respond to U.S. tariff measures and sluggish domestic demand. Second, 2.5 trillion won to provide a safety net for micro-enterprises that have difficulty accessing private finance. The most notable among the SME support measures is the 0.1 trillion won 'Emergency Fund for Trade Risk Response'. As a temporary system for companies affected by U.S. product tariffs, the repayment period for working capital is long at 6 years (extendable by 1 year), and an interest rate of 2.85% is applied, which is 0.3%p lower than the standard interest rate for SMEs (3.15%). The Korea Technology Finance Corporation (KODIT) also established a 1.2 trillion won 'Special Guarantee for Overcoming Crises due to Changes in the Trade Environment', guaranteeing up to 95% for directly affected companies and 90% for indirectly affected companies, and also reducing guarantee fees. The financial safety net for micro-enterprises will be further strengthened. The 'Credit Vulnerable Fund' will provide 0.24 trillion won, an increase of 240 billion won compared to the main budget, for medium-to-low credit micro-enterprises (NCB score 839 or lower) struggling with financial institution loans, supporting up to 30 million won over 5 years. Through local credit guarantee foundations, an additional 2.0 trillion won in new guarantees will be added, expanding the total to 14.2 trillion won. This will be a great help to those experiencing management difficulties, such as micro-enterprises affected by wildfires. The MSS plans to swiftly disburse policy finance to resolve liquidity crises. Funds for SMEs will be available for application from May 14th, the Credit Vulnerable Fund for micro-enterprises, etc., from June 2nd, and general management stabilization funds from July 1st. These customized financial support and preferential benefits will make a practical contribution to securing liquidity and establishing a stable management foundation for businesses. This is expected to soon strengthen the fundamental resilience of our economy and have a positive impact on boosting domestic demand.