SMEs Ministry Launches Public-Private 'Second Chance Support Center'; 1 Trillion Won Second Chance Fund Over 5 Years

## Solid Support for Entrepreneurs Getting Back on Their Feet: Ministry of SMEs and Startups Announces 'Plan to Boost Rechallenge Vitality' A hopeful step has begun for entrepreneurs who are not afraid of failure and are embarking on a challenge once again. The Ministry of SMEs and Startups successfully held the launching ceremony of the 'Rechallenge Support Headquarters' at COEX in Seoul on the 11th, and announced the 'Plan to Boost Rechallenge Vitality,' an innovative roadmap to strengthen the foundation for re-establishment support. This plan embodies the strong will of both the government and the private sector to elevate failure from a mere setback into a valuable experience for new success, and to become a solid pillar of support for entrepreneurs re-challenging themselves to take flight with renewed vigor. ### Symbol of Public-Private Cooperation, 'Rechallenge Support Headquarters' Launched The 'Rechallenge Support Headquarters,' launched on this day, is the culmination of public-private cooperation aimed at spreading a culture of re-challenge and providing practical support. Major domestic private associations and organizations, including the Korea Startup Forum, Korea Venture Business Association, and Korea Federation of SMEs, along with academia, have joined forces, centered around the Korea Youth Entrepreneurship Foundation. Starting with on-site meetings next January, this cooperative body plans to operate diverse programs nationwide to spread the positive value of re-challenge, including 'Failure Concerts' that share experiences of failure and instill courage to move towards success, 'Regional Startup Festivals' that activate region-based re-challenge ecosystems, and 'Rechallenge IRs' that provide opportunities for investment attraction. This is expected to be a significant turning point in imprinting upon society as a whole that re-challenge is no longer something to hide, but a value to be openly discussed and encouraged. ### Institutional Improvements for Swift Re-establishment: Innovation in Time and Procedures The Ministry of SMEs and Startups significantly lowers institutional barriers to enable re-challenging companies to restart without hesitation. The most notable change is the 'shortening of the startup recognition period.' Previously, when re-establishing in the same industry, companies were not recognized as startups for three years, but through an amendment to the 'Enforcement Decree of the Startup Support Act' next year, this period will be dramatically shortened to one year. This measure paves the way for entrepreneurs who have conceived more mature business models based on their experiences of failure to quickly seize new opportunities. Furthermore, the 'Fast Track' system, designed to assist small business owners in swift rehabilitation and bankruptcy procedures, will be gradually expanded to courts nationwide. Through this system, the processing time for small business owners who suffered from complex and lengthy rehabilitation and bankruptcy procedures will be nearly halved from an average of one year to six months, enabling them to return to economic activity more quickly. As time is the most crucial resource for re-challenging entrepreneurs, these institutional improvements are expected to significantly enhance their chances of recovery. ### Solid Financial and Investment Support: Nourishment for Re-challenge Stable funding is essential for the successful establishment of re-challenging companies. To this end, the Ministry of SMEs and Startups plans to create a 'Rechallenge Fund' totaling over 1 trillion won over the next five years, serving as a priming pump for the growth of these companies. This will provide a powerful source of capital for re-challenging companies that might otherwise be marginalized in the private investment market. Furthermore, policy fund support for re-challengers who have difficulty accessing private financing will be expanded. In 2026, 100 billion won in policy funds will be supplied, which is expected to greatly help alleviate initial funding difficulties for re-startups. Additionally, to enable companies showing signs of crisis to proactively respond before falling into an irreversible state, 200 billion won will be provided as structural improvement funds by 2026 to help improve corporate structure and facilitate rehabilitation. In particular, the issue of joint liability, which was one of the biggest burdens for re-challenging entrepreneurs, will also be resolved. From 2026, measures will be pursued to limit joint liability for all venture investments, including those from accelerators (ACs) and new technology financial companies. This will significantly contribute to creating an environment where entrepreneurs can undertake more daring and innovative challenges by reducing the personal burden in case of failure. Freed from the shackles of joint guarantees, entrepreneurs will be able to focus solely on business success without fear of failure. ### Customized Support Programs and Psychological Healing: All-Round Care Re-challenging entrepreneurs face various difficulties beyond business challenges, including legal issues and psychological stress arising during the closure process. The Ministry of SMEs and Startups comprehensively supports these non-business difficulties. In addition to professional legal advisory services for the closure process, psychological healing programs help re-challenging entrepreneurs overcome mental hardships and regain energy for new challenges. Furthermore, dedicated re-establishment tracks will be established for youth and middle-aged individuals, providing customized support tailored to the characteristics and needs of each age group. Young re-challengers will receive support for realizing innovative ideas, while middle-aged re-challengers will be offered programs for successful re-establishment leveraging their rich experience and know-how. This policy aims to support re-challengers of all ages in maximizing their potential. ### Message of Hope: "New Opportunities for Re-challenging Entrepreneurs!" Minister Han Sung-sook of the Ministry of SMEs and Startups emphasized, "The government and private sector will continue to cooperate to provide institutional and financial support so that re-challenging entrepreneurs can gain new opportunities," reaffirming that this plan will provide practical help to them. Like the adage that failure is the mother of success, this 'Plan to Boost Rechallenge Vitality' is expected to be an important turning point for our society to move towards a positive culture that embraces failure and encourages re-challenge. We hope that the robust support from the government and private sector will continue so that all re-challenging entrepreneurs in this land can take powerful steps toward their dreams once again without being discouraged. We sincerely support the challenges of those who have learned through failure and become stronger, hoping they become a new source of vitality for the Korean economy.