Strengthening Support for Three Financial Packages for Small Business Owners
Up to 1.5 Trillion Won Support for Import and Export Damaged Companies
The government is focusing on mitigating management shocks and revitalizing the livelihood economy through domestic demand promotion. In particular, it will strengthen support for the three financial support packages for small business owners and inject policy funds into import and export companies to ease financial and exchange rate shocks.
The Ministry of SMEs and Startups announced the ‘2025 Ministry of SMEs and Startups Work Plan’ on the 8th, outlining these policy directions. The goals for this year are ‘Revitalizing the Livelihood Economy,’ ‘Innovation and Scale-up,’ and ‘Proactive Future Response.’
On the 1st, the won/dollar exchange rate displayed on the exchange office status board in Myeongdong Street, Seoul. Photo by Yonhap News
Revitalizing the Livelihood Economy
First, to reduce the financial burden on more than 90,000 small business owners, support for the three financial support packages for small business owners will be expanded, including the supply of 3.2 trillion KRW in convertible guarantees, relaxation of repayment extension recognition requirements, and granting grace periods for refinancing loans. The ‘Somang (Small Business Owner Hope) Recharge Project’ will be implemented to provide additional loans and other benefits to those who faithfully repay the three financial packages. Additionally, 30 ‘Small Business Debt Adjustment Centers’ will be established nationwide by May, and in collaboration with rehabilitation courts, the debt adjustment procedures for small business owners will be expedited. A fast-track system exclusively for small business owners will be prepared to reduce the bankruptcy and rehabilitation period, which currently takes about 12 months.
The ‘Small Business New Start Hope Project’ will be introduced to provide integrated support for micro small business owners from closure to reemployment and re-entrepreneurship. When small business owners close their businesses, support will be provided for store demolition costs and installment repayment of remaining loans, and reemployment will be assisted through linkage between the Ministry of SMEs and Startups’ Hope Return Package and the Ministry of Employment and Labor’s National Employment Support System.
In case of damage caused by sustained high exchange rates, policy funds of up to 1.5 trillion KRW will be provided to import and export companies affected. Using export vouchers, trade insurance and guarantee subscription fees necessary for the export process will also be supported up to a limit of 10 million KRW. Standards for agreements reflecting exchange rate fluctuations in payment for supplies will be presented, and consulting will be provided to enable principal and subcontracting companies to share exchange rate risks mutually.
To promote the recovery of the venture investment market, the Ministry of SMEs and Startups will advance the 1 trillion KRW scale fund of the Ministry’s mother fund investment project to the first quarter and create a new venture fund of 1.9 trillion KRW.
As a catalyst for promoting domestic demand, the Donghaeng Festival will be held four times annually, including twice in the first half of the year. The initial event will be moved up from May to March. To invigorate the rigid consumer sentiment, a special 15% discount and a 15% level refund event for digital Onnuri gift certificates will be held around the Lunar New Year holiday. The Onnuri gift certificates will be issued at an all-time high scale of 5.5 trillion KRW. The number of neighborhood stores where the gift certificates can be used will be increased by 200 to a total of 550.
The number of duty-free shops selling small and medium-sized enterprise products in airports, which have a high sales inducement effect, will be increased from three to six. The number of tenant companies will be expanded from 900 to 1,800. At the same time, the Ministry plans to maximize the actual sales increase effect in the public procurement market by excluding the practice of disguised supply of large corporation and overseas company products as small and medium-sized enterprise products by distribution SMEs.
An environment where online platforms such as delivery applications and small business owners can coexist will also be created. Through collaboration with the Fair Trade Commission, a full investigation and improvement of unfair terms and conditions disadvantageous to small business owners will be conducted, focusing on oligopoly delivery platform companies. In addition, the pilot evaluation of win-win growth will be expanded to delivery platforms, and inclusion in the win-win growth index will be considered in the mid to long term. Up to 300,000 KRW will be supported for about 680,000 small business owners using delivery and courier services, and fixed cost burdens will be alleviated by lowering card fee rates according to the sales scale of small business owners.
Innovation and Scale-up
Innovative companies in new industries will be nurtured, and digital transformation (DX) of small business owners and SMEs will be promoted. Deep-tech startups with global competitiveness in ultra-gap fields such as system semiconductors and artificial intelligence (AI) will be strategically supported from discovery to commercialization and listing to enable level-up. The top 10% startups in employment, sales, and investment will be identified, and scale-up will be pursued through systematic support such as business commercialization support via open innovation with anchor institutions by sector and technical advice for initial public offerings (IPO). Specialized programs will also be prepared to focus on commercialization and product verification according to the technological characteristics of startups in five high-growth sectors including AI fabless and healthcare.
In addition, the ‘Deep Tech Value-up Program’ will be newly established to discover promising startups and support matching and cooperation based on the demand of large corporations. It was piloted last year with Hyundai Motor Company and will be expanded to eight large corporations this year. By expanding the mother fund investment and increasing investment incentives from large and medium-sized enterprises, a domestic venture investment market worth 13 trillion KRW will be created, and an additional 1 trillion KRW will be raised for global funds, expanding the cumulative total to 13 trillion KRW to support the growth of innovative companies.
To create an environment where excellent overseas talents can start businesses in Korea, the issuance requirements for the ‘Startup Korea Special Visa’ will also be improved. Rather than formal requirements such as degrees and investment attraction performance, evaluation will focus on business performance and innovation to promote the inflow of overseas talents into Korea. Along with this, the ‘(tentative name) K-Startup Silicon Valley Town’ will be established in Silicon Valley, where Korean entrepreneurship is easy, to serve as a public-private global startup and venture hub and a foothold for global expansion.
Kim Seong-seop, Vice Minister of the Ministry of SMEs and Startups, is giving a preliminary briefing on government work reports at the Government Seoul Office Annex on the 6th. Photo by Yonhap News
Along with preparing a ‘Smart Small Business Owner Roadmap’ considering the level of digital transformation, support will be provided to promote the digitalization of 13,000 small business owners. A new ‘TOPS Growth Ladder Project’ will be created to promote digitalization through collaboration with private online platforms, and a support system by growth stage considering the digital transformation level of small business owners will be established by the private sector’s discovery and government and online platform companies. Efficiency in store management will be supported by distributing subscription-based service software (SW) capable of sales management and data analysis, and kiosks that are easy to use for the disabled and elderly will be widely distributed.
A small business export support program utilizing global online distribution networks will also be prepared. The ‘(tentative name) ICON (Amazon X Raikon) Project’ will be newly established, where global distribution giant Amazon provides close support in a package including strategic consulting, product development, and export.
SMEs will accelerate manufacturing innovation through ‘AI Transformation’ (AX) and DX. DX will be promoted through automation, intelligence, and autonomy of processes such as the introduction of manufacturing robots to about 1,700 manufacturing SMEs, smart factories based on manufacturing data, and autonomous factories applying digital twins. The ‘(tentative name) SME AI Diffusion Act’ and ‘(tentative name) Smart Manufacturing Industry Promotion Act’ will be legislated by June to promote AI utilization in SMEs and establish a legal basis for nurturing smart manufacturing specialized companies.
The three-track R&D for SMEs will also be fully launched. The supply of SME R&D in national strategic technology fields (12 fields including semiconductors and secondary batteries), currently at about 38%, will be expanded to over 50%. ‘Global Cooperation R&D,’ which supports commercialization R&D and resolution of technical difficulties for SMEs using technologies held by leading overseas research institutions, will also be promoted.
Policy finance by growth stage will be prepared to support growth from small business owners to SMEs and from SMEs to mid-sized companies. New scope criteria by SME industry, considering recent price and industrial changes, will also be prepared to ensure the smooth operation of the growth ladder system.
Proactive Future Response
To activate tech service exports with low fixed costs and high added value, export vouchers will be newly introduced, and the ‘Global Smart Tech Bridge’ platform supporting matching and transactions with overseas technology demand companies will be fully operated. To promote exports of Hallyu strategic items such as K-Beauty, food, and content, the ‘K-Beauty Global Fund’ will be established, and the 160 million USD Korea-Saudi joint fund will be utilized to support entry into the Middle East game industry, expanding new market development for Hallyu-based content.
At the same time, customized responses to overseas export regulations will be strengthened. ESG (environmental, social, and governance) innovation will be induced throughout the supply chain between large corporations and cooperating SMEs, and support for recognition of halal certification institutions and export SMEs will be expanded to enable SMEs to proactively respond to overseas export regulations.
New low-interest funds will be supplied to companies establishing and operating overseas subsidiaries, and the global business center, a base for overseas expansion, will be expanded. Cooperation with the ‘Global One Team Council,’ which includes 25 overseas diplomatic missions in 17 countries, will be strengthened to resolve difficulties faced by local SMEs.
To create regional commercial districts where people and capital gather, two new ‘Glocal Commercial District Projects’ will be designated and supported with up to 15.5 billion KRW over five years. Three new systems?commercial district planners, commercial district development funds, and commercial district investment associations?will be created for private-led rebuilding of commercial districts. The number of commercial district planners who plan and execute strategies for commercial districts will start at 250 this year and increase to 1,000 by 2027. Century markets with local history and culture will be designated two to three places annually to become landmarks, and traditional markets will be nurtured where history and digital coexist by introducing the latest joint logistics services.
To prevent profitable bankruptcies of SMEs due to CEO aging and lack of family successors, the ‘(tentative name) Corporate Succession Act’ for third-party acquisition and merger (M&A) will be enacted. The entire M&A-type succession process will be supported, including designation of corporate succession support centers, linkage with private M&A brokerage institutions, and subsidy support.
In collaboration with the Ministry of Education and the Ministry of Justice, a support system for foreign students including job training, employment matching, and visa conversion will be established. This will support all stages from attracting foreign students to employment and settlement, helping to alleviate manpower shortages in SMEs.
Minister Oh Young-joo of the Ministry of SMEs and Startups said, “External uncertainties will increase with the inauguration of the Trump administration, and the unstable domestic and international environment will pose even greater challenges, especially for SMEs and small business owners, who are the policy targets of the Ministry of SMEs and Startups. The Ministry will serve as a reliable pillar that small business owners and SMEs can rely on and trust.”
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