Korea Credit Guarantee Fund and IBK to Provide Up to 200 Million Won for Early-Stage Startups... Launch of 'Build

Initial Support of Up to 100 Million Won for Early-Stage Startups Guarantee Limit Expansion After One Year and Three-Year Principal Repayment Deferral Small Business Owner The Dream Package to Be Expanded to Over 12 Trillion Won KSTP Corporate Establishment Targeted by Year-End

Financial authorities are launching the “Startup Build-Up Program,” which supports the step-by-step growth of early-stage startups. Korea Credit Guarantee Fund and IBK Industrial Bank of Korea will initially provide up to 100 million won in support to early-stage companies, and after one year, they will reevaluate the companies’ growth and creditworthiness to potentially expand the guarantee limit to up to 200 million won.

The Financial Services Commission announced on the 21st that it held a signing ceremony for the “MOU on Establishing a Growth Ladder for Early-Stage Innovative Startups” at IBK Industrial Bank of Korea, and unveiled the “Startup Build-Up Program” to discover and support the step-by-step growth of early-stage startups. On this day, Korea Credit Guarantee Fund and IBK Industrial Bank of Korea signed a business agreement to discover early-stage startups in the new growth engines sector and to provide support tailored to each stage of growth.

The core of the Startup Build-Up Program is to provide early-stage startups with priority support of up to 100 million won. Guarantee fees and loan interest rates will also be offered at the most preferential levels. After a year of support, the companies’ credit and growth potential will be reevaluated to further expand the guarantee limit up to 200 million won. In addition, principal repayments may be deferred for up to three years.

Korea Credit Guarantee Fund announced that startups utilizing the program would be awarded extra points in the screening process when applying for follow-up programs according to their growth stage. Companies with high growth potential will also be offered non-financial support, such as consulting from policy finance institutions and corporate IR (Investor Relations) opportunities.

Vice Chairman Kwon Daeyoung said, "Through this agreement between the two organizations, we expect to create a synergistic effect that will open up more opportunities for startups, by combining the know-how of Korea Credit Guarantee Fund in providing stage-specific customized capital to startups from the very early stages, with the experience and network of IBK Industrial Bank of Korea, which has successfully operated the IBK Changgong incubation program."

After the signing ceremony, Vice Chairman Kwon presided over the "14th Policy Finance Support Council." At the council, discussions focused on funding for early-stage startups, strengthening national strategic technology investments, and expanding financial support for small business owners.

Regarding the first agenda item—implementation plan for the Startup Build-Up Program—Korea Credit Guarantee Fund and IBK Industrial Bank of Korea agreed to establish and officially launch a program to lower guarantee barriers for early-stage startups with growth potential. Expansion plans for support to small business owners were also discussed: the “Small Business Owner The Dream Package,” which was introduced by IBK Industrial Bank of Korea and Korea Credit Guarantee Fund in September last year at a scale of 10.5 trillion won, will be expanded to over 12 trillion won. The detailed restructuring plan will be finalized and announced soon.

The current status and future plans for Korea Strategic Technology Partners (KSTP) were also reviewed. The Financial Services Commission, recognizing the lack of specialized managers focused on national strategic technology in the domestic market, decided to actively support the establishment of KSTP. Currently, the Korea Development Bank and Korea Growth Investment Corporation are forming a joint establishment task force for KSTP, speeding up the establishment process. The aim is to sign a shareholder agreement with financial institutions within the year, set up the legal entity by the end of the year, and start operations in the first half of next year.

Opinions were also exchanged regarding the plan to exempt SMEs from joint guarantees in P-CBO. Although all public institutions’ joint SME guarantees were abolished in April 2018, joint guarantees are still required for P-CBO by Korea Credit Guarantee Fund and Korea Technology Finance Corporation. Accordingly, the Financial Services Commission decided to abolish joint guarantees for P-CBO as well. As a result, it is expected that joint guarantee exemption will be applied to approximately 1.9 trillion won of P-CBO per year.

In addition, a manual related to the 7th restructuring plan for the joint innovation growth criteria, which will take effect early next month, will be distributed sequentially to financial companies.

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