Korea Technology Finance Corporation (KOTEC) will fast-track special guarantees worth 1.2 trillion won ($890 million) to support small and medium-sized venture enterprises suffering from the Middle East conflict. The move comes as business conditions for SMEs have deteriorated due to raw material supply disruptions caused by the Middle East crisis.
KOTEC announced that it held a two-day "Special Guarantee Support Meeting for SMEs Affected by the Middle East War" from January 14 to 15 to respond to damages suffered by small and medium-sized venture enterprises and to review the swift execution of the supplementary budget.
KOTEC Chairman Kim Jong-ho visited the Busan branch on January 14 and held an on-site inspection meeting attended by the Busan-Ulsan-Gyeongnam regional headquarters chief and branch staff, urging swift guarantee support for SMEs struggling due to the Middle East conflict.
On January 15, a follow-up inspection meeting was held at the Busan headquarters with regional headquarters chiefs, division heads, and department heads from across the country to intensively discuss supplementary budget execution plans and field response measures.
KOTEC will implement special guarantees starting January 15, utilizing 60 billion won reflected in the supplementary budget passed by the National Assembly on January 10 along with its own funds, providing a total of 1.2 trillion won in support to SMEs that have suffered direct or indirect damage from the Middle East war.
Eligible companies include export-challenged firms that have suffered direct damage such as export contract cancellations and trade payment delays; supply chain-challenged firms struggling with raw material procurement due to crude oil supply imbalances and surging oil prices; and business-challenged firms facing competitiveness concerns from rising exchange rates, oil prices, and logistics costs.
KOTEC will apply preferential measures to eligible companies, including expanding the guarantee ratio from the existing 85% to up to 100% and reducing guarantee fees by up to 0.4 percentage points. Additional support includes special calculation of working capital guarantee amounts (up to 300 million won), expanded calculation limits (120%), and relaxed guarantee screening.
For companies already using guarantees, KOTEC plans to support full maturity extensions for one year to reduce liquidity burdens.
Meanwhile, the Ministry of SMEs and Startups' first supplementary budget for 2026 has been finalized at 1.69 trillion won.
This supplementary budget will be concentrated in four key areas: 462.2 billion won for export SME support, 495.2 billion won for livelihood stabilization including small business owners, 671.9 billion won for startup ecosystem activation, and 61 billion won for artificial intelligence transformation of regional SME manufacturers. In particular, 462.2 billion won has been allocated to minimize damage to export SMEs struggling from the Middle East conflict fallout, while 495.2 billion won has been allocated for livelihood support including small business owner stabilization.
