Ministry of Finance and Economy Expands Financial Support for Small Business Owners: From Long-term Delinquent Debt Adjustment to High-Interest Refinancing

The government is promoting customized financial support measures to help long-term delinquent debtors return to society and to support diligent repayers and small business owners burdened by high interest rates. Support measures for various situations have been prepared, ranging from the purchase and cancellation of long-term delinquent claims to the reduction of guarantee fee rates and the expansion of targets for high-interest refinancing loans.

Purchase and Cancellation of Long-term Delinquent Claims and Expansion of Incentives for Diligent Repayers

According to a video from the Ministry of Finance and Economy, through the 'New Leap Fund', the government is purchasing unsecured loan claims of 50 million won or less that have been delinquent for 7 years or more from individual business owners or individuals from financial companies and public institutions to cancel them or adjust the debt. In particular, in the second half of 2026, a full-scale investigation of securitization companies and the moneylending sector will be conducted, with plans to purchase and cancel or adjust as many identified long-term delinquent claims as possible. Whether debt has been purchased and the results of the repayment ability screening can be checked through the New Leap Fund website. Meanwhile, some delinquents who operated businesses between April 2020 and June 2025 may be eligible for debt adjustment through the 'New Start Fund'.

Benefits for diligent repayers who are repaying loans without delinquency will also be strengthened. The 'Step-Up Special Guarantee for Small Business Owners' from the Korea Credit Guarantee Fund is scheduled to expand the preferential guarantee fee rate from the existing 0.3 percentage point to a maximum of 0.4 percentage point. The guarantee limit will be up to 300 million won, and a guarantee ratio of 90% will be applied. The video explained that based on a guarantee limit of 300 million won, it is possible to save up to 1.2 million won annually through the preferential guarantee fee rate. The 'Hope Dream Loan for Small Business Owners' from the Industrial Bank of Korea also plans to double the total supply limit from the existing 1.5 trillion won to 3 trillion won, and provide a maximum interest rate reduction of 1.8 percentage points and a limit of 500 million won to diligent repayers and small business owners facing management difficulties.

Expansion of High-interest Refinancing Loan Targets and Increase in Support Scale for 2027

The scope of refinancing loan support for small business owners suffering from high interest rate burdens will also be widened. The high-interest refinancing loan operated by the Small Enterprise and Market Service is a system that converts high-interest loans of 7% or more per year from the commercial financial sector into low-cost fixed-rate policy funds of 4.5% per year. Previously, it only applied to loans approved before June 30, 2025, but through this expansion measure, the support target will be expanded to loans approved before December 31, 2025. For example, if a 100 million won loan at 7% per year is refinanced at a 4.5% fixed rate, the annual interest decreases from 7 million won to 4.5 million won, allowing for a saving of about 200,000 won every month. However, new high-interest loans received in early 2026 are not included in this expansion application.

The government plans to expand the scale of financial support for small business owners in 2027 to 4.25 trillion won, an increase of approximately 600 billion won from this year. It announced plans to convert the general management stability fund project into a second preservation project to increase the support scale to 2 trillion won, and to operate loan projects totaling 2.25 trillion won, including Vulnerable Small Business Owners Management Stability Fund (1.3 trillion won), Growth Promotion Fund (700 billion won), and Crisis Response Fund (250 billion won). Detailed eligibility requirements and implementation timing should be checked through the official websites of the relevant agencies.