KOSME to Provide Total of 198.5 Billion Won in Value Chain Stabilization Funds This Year

Co-Growth Network Loan: Short-Term Production Financing Based on Purchase Orders
Accounts Receivable Factoring: Enhancing Transaction Stability Through Non-Recourse Receivables Acquisition

On January 20, the Korea SMEs and Startups Agency (KOSME) announced that it will provide 198.5 billion won this year in accordance with the "2026 Value Chain Stabilization Fund Support Plan Announcement."

KOSME supports stable financing and competitiveness enhancement for small and medium-sized enterprises (SMEs) through the Value Chain Stabilization Fund, which is a short-term liquidity fund. The support scale for this year remains the same as the previous year, and applications will be accepted starting from January 21. The budget has been allocated as follows: 139.5 billion won for the Co-Growth Network Loan and 59 billion won for Accounts Receivable Factoring.

The Network Loan program aims to foster a collaborative ecosystem among large, mid-sized, and small enterprises. When a contracting company that has signed an agreement with KOSME recommends a subcontracted SME, KOSME provides production financing to the subcontracted SME based on the purchase order. The payment for the delivered goods is made by the contracting company to KOSME, which is then used to repay the loan. This is a differentiated supply chain-linked financial support compared to KOSME's existing policy funds, characterized by the rapid provision of short-term, low-interest production financing based on purchase orders.

Jungjinkong Headquarters, Jinju City, Gyeongsangnam-do

The eligible recipients are subcontracted SMEs that have a transaction record within the past year with a contracting company that has signed an agreement with KOSME. The support limit is up to one-third of annual sales (up to one-half for manufacturing) with a maximum application amount of 1.5 billion won. The outstanding balance limit is set at 2 billion won. Notably, to further promote co-prosperity, KOSME will expand the Network Loan support limit for recommendations by contracting companies this year. The limit for large companies will be increased from 20 billion won to 25 billion won, and for mid-sized companies from 15 billion won to 20 billion won, thereby providing more funding to subcontracted SMEs facing production financing difficulties.

The Factoring program not only provides liquidity support but is also a financial service in which the policy institution acquires the sales receivables of the selling company without recourse. This prevents the risk of a chain of bankruptcies by stopping the transfer of default risk from the purchasing company to the selling company. Eligible recipients are SMEs with financial statements for the past three years and a transaction record of at least one year (at least three transactions within the past year) with the purchasing company. The support limit is up to one-third of annual sales (up to one-half for manufacturing) per company, with a maximum annual application of 1 billion won.

In particular, starting this year, to address the previous issue of funding being concentrated in the first half and not being sufficiently available in the second half, KOSME will implement monthly equalized application periods and distribute the annual budget on a monthly basis, ensuring a steady supply of factoring funds throughout the year. A separate budget will be allocated for companies located outside the Seoul metropolitan area. KOSME plans to actively discover outstanding sellers and buyers in each region to help revitalize the local economy.

Applications for both the Network Loan and Factoring programs will be processed entirely online and non-face-to-face. Details and application procedures can be found on the KOSME website. Kang Seokjin, Chairman of KOSME, stated, "The Network Loan and Factoring programs are important financial services that help SMEs secure financing smoothly at the production and sales stages, thereby enhancing transaction stability. We will strive to create an environment where SMEs can continue business with confidence through factoring, and to spread a culture of co-growth among large, mid-sized, and small enterprises through the Network Loan program."