First Step Toward a 100 Billion KRW Scale SME Win-Win Growth Network This Year

Targeted Support to Alleviate Production Fund Difficulties for Small and Medium Enterprises

The Ministry of SMEs and Startups announced that it will newly launch the ‘SME Win-Win Growth Network Loan’ this year to resolve the financial difficulties SMEs face after signing supply contracts, and will begin accepting applications from the 2nd.

SMEs require securing funds for production, such as payments for raw materials, due to the time gap between receiving orders and delivery (payment settlement). However, they have faced issues such as high interest rates and loan limit restrictions, leading to increased demand for short-term financing support. In response, the Ministry of SMEs and Startups plans to promote the Win-Win Growth Network Loan on a scale of 100 billion KRW this year, focusing on providing short-term, low-interest production funds to regional SMEs by fostering a cooperative ecosystem between large and small businesses to strengthen the supply chain.

The Win-Win Growth Network Loan is a project where ordering companies that have signed a win-win growth agreement with the Korea SMEs and Startups Agency recommend cooperative SMEs that have received orders. Based on the delivery order, up to 80% of the order amount is lent early as short-term production funds, and the ordering company repays after delivery. Eligible SMEs are those that have transaction records with the ordering company within the past year and can apply for up to 1.5 billion KRW within one-third of their latest financial statement sales (up to half for manufacturing industries). Ordering companies can recommend cooperative SMEs to receive support within a limit of 10 billion KRW.

The loan period can be selected and applied for in 15-day increments within one year by mutual agreement between the ordering and ordering-receiving companies, considering payment terms and financial conditions. Additionally, production funds are provided at interest rates lower than those of commercial banks, reducing the financial burden on SMEs. Since the ordering company is responsible for repayment after delivery, the receiving company can freely manage funds and alleviate concerns about financial difficulties caused by client insolvency.

By conducting the support process digitally and non-face-to-face, the Win-Win Growth Network Loan is expected to resolve SMEs’ financial difficulties through rapid support within five business days from application to loan disbursement. Choi Won-young, Director of Global Growth Policy at the Ministry of SMEs and Startups, stated, “With the recent continuation of high interest rates and inflation, the production and management conditions of SMEs remain challenging. We hope that through the Win-Win Growth Network Loan, SMEs can easily secure short-term production funds early, promoting smooth production, and further fostering a virtuous cycle of strengthening regional supply chains and win-win cooperation.”