On the 19th, the Ministry of SMEs and Startups announced that, in response to the sluggish economic recovery and competition in AI technology, it has prepared an additional supplementary budget of 1.405 trillion won following the 4.8 trillion won supplementary budget for the first quarter of 2025 that was approved in May.
The Ministry of SMEs and Startups has focused the supplementary budget on three main themes: ▲ recovery and normalization of small business management ▲ growth of SMEs and start-ups and revitalization of the local economy ▲ dissemination and utilization of technological innovations, including AI.
To assist in the recovery and normalization of small businesses, efforts have first been made to address the debt issues that serve as the foundation for their recovery. The Ministry of SMEs and Startups plans to alleviate the debt repayment burdens of small businesses that have faced difficulties during the COVID-19 pandemic, and the Financial Services Commission will focus on debt adjustments for non-performing loans.
The Ministry's plan to alleviate the repayment burden for small businesses will be implemented through policy funds for small businesses and special guarantees from regional credit guarantee foundations. The policy funds will offer long-term installment repayments (5 to 7 years) and a 1 percentage point cut in interest rates to small businesses facing management difficulties. For businesses affected by COVID-19, the regional credit guarantee foundations will transition to long-term (7 years) and low-interest (1 percentage point secondary support) special guarantees, and for businesses that have closed, the repayment period will be extended from 7 years to a maximum of 15 years, reducing the repayment burden after closure and applying preferential interest rates.
In addition, the Hope Return Package project will receive an additional allocation of 17.1 billion won following the first supplementary budget, expanding the support limit for the demolition and restoration of closed small business stores to 2 million won, with a maximum support of 6 million won until the end of the year. The smart store project has also been expanded to reflect additional on-site demand.
To promote the growth of SMEs and the revitalization of the local economy, expansions have been made to programs that are closely related to job creation, such as entrepreneurship packages and the dissemination and expansion of ICT-converged smart factories. The entrepreneurship package project will receive an additional 42 billion won to promote the growth of promising deep-tech startups in areas like AI and biotech, and to facilitate funding for startups, an additional 200 billion won will be allocated for innovative startup commercialization funds. An AI track will be newly established in the ICT-converged smart factory dissemination project to enhance the smart transition of local manufacturing SMEs, with an additional 24 billion won allocated for autonomous factories (AI) and large-small business co-prosperity (AI).
Finally, to promote the dissemination and utilization of technological innovations, including AI, expansions have been made to regional AI transformation initiatives, funding for venture capital, and support for fostering ultra-gap startups. The regionally led AI transformation project is a locally tailored program autonomously planned by local governments to support the development and introduction of AI solutions that impact the ecosystem as a whole, workforce training, and infrastructure, with an additional 50 billion won allocated for this purpose. To support the large-scale growth funds needed for the unicorn leap of deep-tech ventures and startups in AI and other fields, an additional 400 billion won will be injected into the SME venture capital fund, and an additional 12 billion won will be allocated for the Ultra-Gap Startup 1000+ project.
Minister Oh Youngju said, 'Through the second supplementary budget, we plan to actively support the normalization and growth of the management environment for SMEs and small businesses, making it a catalyst for their swift recovery,' adding, 'We will continue to monitor the projects supported through the first supplementary budget to ensure they are implemented quickly.'