Busan Metropolitan City is launching a 500 billion won policy fund program to address financing difficulties for small and medium-sized enterprises and foster promising companies.
The city announced on June 3 that it signed a business agreement for "Busan and Yeongnam Region Hub Enterprise Development Support" with the Busan Chamber of Commerce and Industry, Korea Credit Guarantee Fund, Korea Technology Finance Corporation, and Hana Bank at the city hall's international protocol room. The core of the agreement is to create a 500 billion won policy fund that links financing, guarantees, and interest rate support for SMEs with high growth potential.
Under the agreement, the city will provide 2.0% interest rate subsidies, while the Busan Chamber of Commerce and Industry will handle financial support guidance and recommendations for member companies. Korea Technology Finance Corporation and Korea Credit Guarantee Fund will provide credit guarantees based on contributions, and Hana Bank will apply preferential interest rates along with special contributions.
Support is capped at 3 billion won per company, with the interest subsidy limit set at 800 million won to allow more companies to benefit. The city raised the interest subsidy rate from 1.5% last year to 2.0% this year, further reducing the financial burden on businesses.
The repayment term is three years. Companies can choose between a two-year grace period followed by one-year installment repayment, or a three-year grace period followed by lump-sum repayment, enhancing flexibility and stability in corporate fund management.
Through this agreement, the city plans to nurture companies with strong technology and growth potential as hub enterprises, building a virtuous cycle industrial ecosystem that leads to expanded investment and job creation.
Last year, Busan executed 2.033 trillion won in policy funds to support SMEs and small business owners. The city plans to expand support to exceed last year's level through supplementary budgets this year.
"Busan SME exports recorded an all-time high of $8.44 billion last year, continuing our growth momentum," said Busan Mayor Park Hyung-jun. "Through this agreement, we will create a financial environment where companies can invest and grow with confidence, enabling Busan to leap forward as a central city leading the Yeongnam regional economy."