Jungjingong Eases Funding Support Requirements for 'Short-term Liquidity Crisis Companies'

Lowering the Threshold for Policy Funds to Overcome the COVID-19 Crisis
Strengthening Support Systems for Growth-Promising Companies Facing Temporary Financial Difficulties

Source=Small and Medium Business Corporation

[Asia Economy Reporter Kim Daeseop] The Small and Medium Business Corporation announced on the 28th that it will relax the policy fund application requirements and improve the evaluation method to ensure that companies facing short-term liquidity crises are not excluded from the policy fund application stage due to financial reasons.

This improvement in policy fund application requirements and evaluation methods was prepared to lower the threshold for policy funds for small and medium-sized venture companies facing liquidity crises such as exceeding debt ratios due to the impact of the novel coronavirus infection (COVID-19), and to strengthen the support system for promising growth companies experiencing temporary financial difficulties.

Previously, companies with more than 5 years of operation exceeding the debt ratio and marginal companies with more than 5 years of operation were restricted from applying for policy funds or received selective support through a special review committee. This time, by relaxing the requirements, the existing special review committee for marginal companies will be expanded to a 'corporate presentation-style review system.'

This method allows applicant companies to directly explain the originality and distinctiveness of their technology, market size and growth potential, and sales growth, while a panel of judges including private experts focuses on evaluating the company's future growth potential to decide on funding support.

In addition, a 'third-party re-evaluation relief system' will be introduced for companies exceeding the debt ratio. Even if they fail the policy fund support evaluation, they will be given an opportunity for re-evaluation. The final decision on funding support will be made by the loan review committee.

Kim Hakdo, Chairman of the Small and Medium Business Corporation, said, "We will do our utmost to expand funding support for companies that were previously excluded from policy fund support to normalize the management of small and medium venture companies in the post-COVID era," adding, "We will also spare no effort to provide multifaceted support to secure competitiveness that can respond to the rapidly changing economic environment."