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Busan City Signs Agreement for Financial Support to Foster Startups and Venture Companies – Launches KRW 100 Billion Financing Initiative

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Mayor Park Heong-joon of Busan announced on July 31 that the City has signed a “Financial Support Agreement for Fostering Startups and Venture Companies” with Korea Technology Finance Corporation and BNK Busan Bank to enhance financing for local startups and venture businesses.

This agreement follows the “Busan Venture Investment Vision” announced at the Venture Investment Promotion Roundtable held on March 6, 2025.

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Key Details of the Agreement:

• ●Special Fund Contribution:
  BNK Busan Bank will contribute a total of KRW 5 billion over five years as a special fund.
  KOTEC will use a 20x leverage multiplier to provide KRW 100 billion in financing.

• ●Eligible Companies:
  Startups and venture companies that meet KOTEC’s guarantee requirements and have their headquarters or main operations in Busan.
  Eligible sectors include:

• 1.Innovative growth

• 2.Technology-based startups

• 3.Job creation

• ●Loan Purpose & Limits:

• 1.Purpose: Working capital

• 2.Maximum loan: KRW 3 billion per company

• 3.Interest subsidy from Busan City:
  · For loans up to KRW 800 million, the City provides:
  · 1st year: 1.5% subsidy
  · 2nd–3rd year: 1.0% subsidy (subsidy rates subject to change based on policy)

• ●Guarantee & Interest Benefits:

• 1.KOTEC provides a 100% guarantee for three years

• 2.Guarantee fee reduced by 0.4 percentage points for three years

• 3.BNK Busan Bank offers a reduced interest rate, applying the monthly COFIX (Cost of Funds Index) + 1.7%

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The City plans to announce the financial support loan program in August and begin accepting applications in September.

Nam Dong-woo, Busan’s Director General of Finance & Startup Policy, stated:

“This agreement is expected to help local startups and venture companies secure stable funding through various financial methods beyond investment,
thereby strengthening the foundation for innovation and growth.
We will continue to develop and promote diverse policies to foster a vibrant startup and innovation ecosystem in Busan.”

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Appendix: Summary of Agreement

Item	Details
Purpose	To support startups and venture companies through financial assistance
Scale	KRW 5 billion special fund by Busan Bank leveraged 20x for total KRW 100 billion in support
Eligibility	Companies headquartered or primarily operating in Busan, satisfying KOTEC criteria and involved in innovation, technology startups, or job creation
Loan Use	Working capital
Loan Limit	Up to KRW 3 billion per company (KRW 800 million eligible for interest subsidy)
Subsidies	Interest subsidy from Busan City for 3 years (1.5% year 1, 1.0% years 2–3)
Guarantee	100% guarantee by KOTEC for 3 years, 0.4%p reduction in guarantee fees
Interest Rate	COFIX + 1.7% (preferential to standard loan products)
Agreement Title	Financial Support Agreement for Fostering Startups and Venture Companies in Busan
Parties	Busan Metropolitan City, KOTEC, BNK Busan Bank
Agreement Type	Written Agreement
Date Signed	July 31, 2025