Seoul City to Provide 2.4 Trillion Won in Support for Small Business Owners This Year

SME Development Funds for Small Businesses and Entrepreneurs
Fee Waivers Including Lower Additional Interest Rates on New Loans
Establishment of a 100 Billion Won Support Fund for Vulnerable Businesses
"Easing Repayment Burdens for Small Business Owners and Revitalizing the Local Economy"

The Seoul Metropolitan Government will provide a total of 2.4 trillion won in financial support for small business owners in 2026. This includes subsidies and special guarantees to foster small and medium-sized enterprises, and starting this year, a new “Support Fund for Vulnerable Businesses” has also been established.

According to the Seoul Metropolitan Government on January 1, the city will focus on reducing financial costs for small and medium-sized enterprises and small business owners this year by lowering the additional interest rates on funds in cooperation with commercial banks and fully waiving early repayment fees.

In 2026, the Seoul Metropolitan Government will provide financial support totaling 2.4 trillion won, including subsidies for small and medium-sized enterprise development and special guarantees, to support small business owners. The photo shows a market in Seoul. Photo by Yonhap News Agency

The total support amounts to 2.4 trillion won. This includes 2.2 trillion won in policy funds and 200 billion won in special guarantees. To ease the financial burden on small business owners, the city will work with 16 commercial banks to lower the additional interest rate on new loans from cooperative bank funds by 0.1 percentage points.

Early repayment fees, which ranged from 0.03% to 0.17% of the repayment amount by bank, will be completely eliminated. As a result, all SME development funds provided by the city can be used without early repayment fees, allowing borrowers to repay loans or switch to policy funds without any burden.

By type of fund: ▲1.8 trillion won in “Direct Loans (Fixed Rate)” using SME development fund resources; ▲2.02 trillion won in “Commercial Bank Cooperative Funds (Variable Rate, Interest Subsidy),” where the city covers part of the loan interest from commercial bank resources; ▲200 billion won in “Safe Account (Special Guarantee)” in the form of an overdraft account.

By target group: ▲810 billion won for vulnerable small business owners, including those with mid-to-low credit and socially disadvantaged groups; ▲385 billion won to promote the growth of prepared startups and outstanding companies; ▲1.205 trillion won for general small business owners.

Applications for funds will be accepted starting January 2. The newly established “Support Fund for Vulnerable Businesses” and the non-face-to-face overdraft-type “Safe Account” will be separately announced after consultations with banks and system improvements.

The Seoul Metropolitan Government will also actively identify and support vulnerable businesses based on analyses such as the “Small Business Status Analysis” by the Seoul Credit Guarantee Foundation Policy Research Center. A representative measure is the creation of a 100 billion won “Support Fund for Vulnerable Businesses” for those facing management or repayment difficulties. Businesses designated as vulnerable by the Seoul Credit Guarantee Foundation can receive up to 50 million won and a 2.5% interest subsidy.

The “Hope Companion Fund” (refinancing/loan switching) will expand its coverage from companies using Seoul Credit Guarantee Foundation guarantees to those using “private financial institution loans,” allowing high-interest loans to be converted into long-term, low-interest policy funds. The Hope Companion Fund will provide 300 billion won, offering up to 100 million won, a 1.8% interest subsidy, and full guarantee fee support to companies facing management or repayment difficulties, whether they are currently using Seoul Credit Guarantee Foundation guarantees or loans from other financial institutions.

Additionally, to support companies that contribute to job creation and employment stability, the “Outstanding Job Creation Company Fund” will be expanded by 25 billion won from the previous year, supplying a total of 250 billion won. Starting this year, small businesses and small business owners enrolled in “Industrial Accident Insurance for SME Business Owners” will also be eligible for support, thereby promoting social insurance enrollment.

Lee Haeseon, Director of the Seoul Metropolitan Government’s Civil Affairs and Labor Bureau, stated, “This year’s policy fund support has focused on easing the repayment burden for small business owners through interest rate reductions and the complete waiver of early repayment fees. We will do our utmost to support small business owners and SMEs so that they can reach new heights even in a challenging business environment, and to revitalize the local economy.”