Korea SMEs and Startups Agency to Support Promising Startups with Growth-Sharing Loans

Applications Open from March 4, Up to 2 Billion Won Per Company
Loan Support Focused on Future Value

The Ministry of SMEs and Startups and the Korea SMEs and Startups Agency announced on March 3 that, in line with the "2026 SME Policy Fund Lending Plan," applications for policy funds under the growth-sharing model will begin on March 4.

For 2026, the total support for investments and loans will be 110 billion won, comprising 60 billion won for growth-sharing loans and 50 billion won for investment-conditional loans.

The "growth-sharing loan" is a model in which the Korea SMEs and Startups Agency acquires convertible bonds (CB), redeemable convertible preferred shares (RCPS), and convertible preferred shares (CPS) of companies with strong growth potential and high likelihood of initial public offering (IPO). The maximum amount per company is set at 2 billion won.

To address the imbalance in venture investment, the program will focus on supporting companies that are not well known in the private investment market, companies located outside the Seoul metropolitan area, and startups.

Since January, the Korea SMEs and Startups Agency has been accepting applications for "investment-conditional loans" in the form of bridge loans, totaling 50 billion won annually, to help startups overcome the so-called "Death Valley" by providing funding to bridge gaps between initial and follow-on investments.

Eligible applicants for investment-conditional loans are companies that have received venture investment of at least 100 million won from an investment institution within the past 24 months as of the application date. The plan is to provide large-scale, low-interest loans, mainly to companies with strong technological capabilities but whose financial performance has not yet materialized, thereby offering promising companies greater opportunities for growth.

Under the support conditions, the Korea SMEs and Startups Agency will be granted warrants equivalent to 5% of the total loan amount, and supported companies will be required to make early repayment of up to 20% of the loan amount with investment funds upon securing follow-on investments.

Companies seeking support through the policy fund investment and loan program can apply online via the Korea SMEs and Startups Agency website.

Sukjin Kang, President of the Korea SMEs and Startups Agency, stated, "The growth-sharing loans and investment-conditional loans are policy finance instruments that focus on the future value and growth potential of companies. We will further strengthen stage-specific financial support so that startups can overcome the Death Valley and connect to private investment."

This content was produced with the assistance of AI translation services.