2026 Small Business Policy Fund Guide: Eligibility and Application

The Korean government provides substantial financial support to small business owners through policy funds (정책자금). These loans offer significantly lower interest rates than commercial bank loans—often 2-3% compared to market rates of 5-7%. For small business owners struggling with high interest costs or needing capital for growth, policy funds can be a game-changer. However, the application process can be complex and competitive. This guide covers everything you need to know to successfully apply in 2026.

Types of Small Business Policy Funds

The Small Enterprise and Market Service (소상공인시장진흥공단) administers several types of policy funds, each designed for different needs. Understanding which fund matches your situation is the first step toward a successful application.

• General Business Fund (일반경영안정자금): For everyday business operations. Covers working capital needs like inventory purchases, rent, and payroll. Loan limit: up to 70 million won.
• Emergency Business Fund (긴급경영안정자금): For businesses affected by natural disasters, economic downturns, or other emergencies. Higher approval rates during crisis periods.
• Growth Support Fund (성장기반자금): For businesses looking to expand, renovate, or invest in equipment. Loan limit: up to 100 million won.
• Innovation Fund (혁신성장자금): For businesses adopting new technologies, digital transformation, or innovative business models. Favorable rates and terms.
• Special Purpose Fund (특별경영안정자금): Periodically offered for specific policy goals such as supporting traditional markets or businesses in disadvantaged areas.

Eligibility Requirements

To qualify for small business policy funds, you must meet several criteria. The basic requirements include: operating a business in Korea with a valid business registration, having fewer than 5 employees (10 for manufacturing), annual revenue below the industry-specific threshold (typically 1-12 billion won depending on industry), and being in business for at least 6 months. Certain industries like entertainment, gambling, and real estate speculation are excluded.

• Business registration: Must have an active 사업자등록증 (business registration certificate).
• Employee count: Fewer than 5 regular employees (10 for manufacturing and mining).
• Revenue threshold: Varies by industry, typically under 1-12 billion won annually.
• Operating history: At least 6 months of business operation (some funds require 1 year).
• Credit score: Minimum credit score of 744 (NICE) or equivalent. Lower scores may still qualify for certain funds.
• Tax compliance: No delinquent taxes. Must be current on all national and local tax payments.

Application Process

The application process typically takes 2-4 weeks from submission to disbursement. Start by checking your eligibility on the Small Enterprise and Market Service website (semas.or.kr). Applications are usually submitted online through the website or at local branch offices. You'll need to prepare your business registration, financial statements, tax payment certificates, and a business plan. After submission, a field evaluation may be conducted where an assessor visits your business location.

Interest Rates and Terms

Policy fund interest rates are significantly below market rates. As of 2026, rates typically range from 2.0% to 3.5% depending on the fund type and applicant qualifications. Loan terms are usually 5 years with a 2-year grace period (interest-only payments during the grace period, then principal + interest). Some funds offer up to 7-year terms. Compared to commercial bank small business loans at 5-7%, policy funds can save hundreds of thousands of won per month in interest payments.

Tips for Approval

• Apply early: Policy funds have annual budgets that can run out. Apply as soon as the application period opens (usually January-February).
• Prepare a solid business plan: Even for general operating funds, a clear explanation of how you'll use the money increases approval chances.
• Maintain good credit: Check your credit score before applying and resolve any issues.
• Keep clean financial records: Organized bookkeeping and tax compliance demonstrate business stability.
• Consider local branch offices: Some funds are easier to access through regional offices that may have less competition.
• Attend information sessions: The Small Enterprise and Market Service regularly hosts workshops explaining the application process.

Before applying, use QuickFigure's loan comparison calculator to see how much you could save with a policy fund compared to a commercial bank loan. Compare monthly payments and total interest to understand the real financial impact of securing a lower-rate policy fund.