Ministry of SMEs and Startups Strengthens Support for Small Business Owners Facing Management Crisis

Minister Oh Youngjoo Holds Meeting on Recovery Support Projects and Social Safety Net
Hope Return Package Budget Expanded to 245 Billion KRW

The Ministry of SMEs and Startups is focusing its policy capabilities to support the recovery of small business owners experiencing management crises.

The Ministry of SMEs and Startups announced on the 14th that Minister Oh Young-joo held a 'Recovery Support Project and Social Safety Net Meeting' at the Seoul Jungbu Recovery Support Center and announced the policy direction for 2025.

At the meeting, Minister Oh announced the policy direction for the small business owners' recovery support project with the participation of small business owners and experts. So far, the Ministry of SMEs and Startups has been operating a task force involving related ministries and private experts since October last year to prepare the 2025 recovery support plan.

The policy direction for the 2025 recovery support project is as follows.

First, to adjust the debts of small business owners, a fast track will be introduced to shorten the required time for rehabilitation, bankruptcy, and workout processes, and after debt adjustment, it will be linked with recovery support projects and financial support.

In the employment sector, customized employment education programs will be expanded and reorganized, and considering the livelihood and educational conditions of small business owners who have closed or are planning to close their businesses, both online and offline education will be combined to strengthen employment support through tailored counseling.

Additionally, a specialized employment program (Ministry of SMEs and Startups Hope Return Package + Ministry of Employment and Labor National Employment Support System) will be promoted through collaboration with related ministries (Ministry of Employment and Labor, Financial Services Commission), providing allowances during employment education and job search activities, and expanding employment success allowances to encourage employment. Upon completion of education, debt adjustment will offer preferential treatment for principal reduction rates (maximum 80→90%) to help restore credit.

Next, in the re-challenge (re-startup) sector, support systems will be advanced to help small business owners who are experiencing management crises or have closed their businesses to stabilize and recover their enterprises by diagnosing and improving management conditions, matching dedicated PMs, and providing in-depth mentoring to ensure successful management improvement.

If the diagnosis confirms closure, support will be linked to specialized employment programs, or for prepared re-startup support, basic education (over 6 hours) and practical training (around 24 hours) will be provided to present re-startup commercialization directions and foster a management mindset. Furthermore, a dedicated PM for strategic tasks will be assigned to support recovery (re-startup) commercialization.

Moreover, as the number of small business closures increases, to alleviate the burden of closure procedures, business liquidation consulting, legal and debt counseling, and store demolition cost support will be expanded.

In the social safety net sector, to increase the employment insurance subscription rate of small business owners and self-employed individuals, application and payment procedures will be simplified. The Yellow Umbrella Mutual Aid will expand partner institutions offering preferential financial products. The role as a social safety net will be strengthened by raising the income deduction limit (increased by 1 million KRW for under 100 million KRW income, and a new bracket of 40 million to 60 million KRW established) and easing tax burdens on cancellation refunds.

Finally, the Ministry of SMEs and Startups has reorganized its structure, launching the Small Business Management Stability Support Group and significantly increasing personnel. Going forward, it plans to systematically support policies for overcoming management crises and stabilizing small business owners, including small business recovery support.

Minister Oh said, “We are making our best efforts together with the public and private sectors to provide prompt recovery support to small business owners and self-employed individuals in crisis. In particular, we will do our utmost to swiftly execute the significantly increased 245 billion KRW budget for the Hope Return Package for small business recovery support this year,” adding, “We will continue to listen to voices from the field through recovery support projects and social safety nets to help find hope and reflect them in our policies.”