KOSME Boosts Liquidity in Cosmetics Industry with "K-Beauty Loan"

Expanded Production Financing for Leading Cosmetics Brands
40 Billion Won Allocated for 2026 Budget

The Korea SMEs and Startups Agency (KOSME) announced on February 24 that it is launching funding support for the "2026 K-Beauty Loan for SMEs."

The "K-Beauty Loan," for which applications and submissions will begin on the 26th, is a policy fund that provides production financing based on confirmed purchase orders, taking into account the characteristics of the cosmetics industry, where products are manufactured in advance and payments are collected afterward. It was introduced to ease funding difficulties for small and medium-sized cosmetics companies that have secured orders but struggle to raise initial production costs.

Small & Medium Business Corporation headquarters, Jinju, South Gyeongsang Province

The "K-Beauty Loan," which was newly established last year, fully executed its loan budget of 20 billion won to 183 companies within just six months of implementation, confirming strong funding demand on the ground. In addition, the export value of supported companies increased by 18.8% compared to before, and the number of exporting companies rose by 24.8%, demonstrating that policy finance has translated into stronger export competitiveness for K-beauty.

This year, the budget has been set at 40 billion won, double the previous year. KOSME will also ease support conditions and expand the scope of support by reflecting feedback from the field. The main changes are as follows: ▲ The maximum support limit per loan will be increased from 100 million won to 150 million won ▲ The scope of support will be expanded to include not only cosmetics production costs but also costs for essential ancillary materials for cosmetics, such as containers and pumps ▲ The mandatory period for using the funds (the period from the loan date until full disbursement of the loan) will be extended from six months to 12 months ▲ The allowable proportion of funds that can be used for purposes other than product production, such as marketing and logistics, will be raised from 20% to 30%.

In addition, to lower entry barriers for promising small and medium-sized brand companies, KOSME improved the system in the second half of last year so that companies can apply even without a recommendation from the ordering company. As a result, SME brand companies can now apply for funds with only confirmed purchase orders. KOSME Chairman Kang Sukjin said, "The domestic cosmetics industry is expanding its global competitiveness based on K-culture," adding, "Through the K-Beauty Loan, we will spare no effort in providing support in various ways so that the creative products and innovative technologies of outstanding domestic cosmetics brands can become a bridge to reach consumers around the world."