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Busan Metropolitan City to Promote Activation of SME and Venture Business M&A Through Public-Private Cooperation… Full-Scale Launch of KRW 20 Billion in Financial Support

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Busan Metropolitan City, under Acting Mayor Kim Kyung-duk, announced today (May 18) that it has signed a written business agreement titled “Support for the Activation of M&A for Sustainable Management of SMEs in Busan” with the Busan Regional Office of SMEs and Startups, Busan Chamber of Commerce and Industry, Korea Technology Finance Corporation, and BNK Busan Bank to provide financial support aimed at ensuring stable management and business succession for local SMEs and venture businesses.

This agreement was designed to facilitate mergers and acquisitions (M&A) among local SMEs and venture businesses in order to ease succession gaps and systematically foster companies with high growth potential.

The agreement establishes a cooperative support framework among Busan Metropolitan City, the Busan Regional Office of SMEs and Startups, Busan Chamber of Commerce and Industry, Korea Technology Finance Corporation, and BNK Busan Bank to support local businesses.

Based on this cooperative framework, Busan Metropolitan City and the participating organizations will establish and provide a total of KRW 20 billion in policy financing to local companies.

Under the agreement, Busan Metropolitan City will provide a 2.0% interest subsidy, while the Busan Regional Office of SMEs and Startups and Busan Chamber of Commerce and Industry will promote the financial support program to local businesses and recommend eligible companies.

Korea Technology Finance Corporation will provide credit guarantees backed by contributions, while BNK Busan Bank will offer special contributions and preferential interest rates.

Loans of up to KRW 10 billion per company will be available, and the interest subsidy support limit from Busan Metropolitan City has been set at KRW 800 million to ensure that a greater number of businesses can benefit from the program.

In particular, Busan Metropolitan City has increased the interest subsidy rate from 1.5% last year to 2.0% this year to help reduce the financial burden on companies.

Repayment terms are set at three years, with businesses able to choose either a two-year grace period followed by one year of installment repayment or a three-year grace period followed by lump-sum repayment, depending on their financial management needs.

Through this agreement, Busan Metropolitan City plans to further strengthen its public-private cooperation system and actively identify promising SMEs and venture businesses with strong technological capabilities and growth potential, while supporting their growth and competitiveness through mergers and acquisitions.

The city also intends to establish a virtuous support cycle that extends beyond simple financial assistance to include “company discovery–guarantees–financial support–growth.”

For detailed information, including application procedures, companies may contact the Korea Technology Finance Corporation representative number at 051-606-6500 or inquire at local branch offices.

Meanwhile, in response to increased management burdens caused by factors such as geopolitical risks in the Middle East this year, Busan Metropolitan City has organized a supplementary budget to supply a total of KRW 1.368 trillion in working capital support for SMEs, the largest scale nationwide. In addition, the city is also providing KRW 800 billion in financial support for small business owners to stabilize management conditions and revitalize the local economy.

Kim Bong-cheol, Assistant Mayor of Digital Economy Office, stated, “Through this agreement, we will do our utmost to support the activation of M&A among local SMEs and venture businesses while strengthening the foundation for resolving business succession gaps and stabilizing corporate management.”

He added, “Busan Metropolitan City will continue to actively identify and foster promising companies through public-private cooperation and establish a sustainable growth foundation for the Busan economy by supporting corporate growth and strengthening competitiveness.”