Busan City provides 1.368 trillion won in operational funding support to small and medium-sized enterprises... easing operational burdens

Busan City will provide a total of 1.368 trillion Korean won in operational funds for small and medium-sized enterprises starting from May 2026, aiming to alleviate the operational burden of regional businesses caused by sharp exchange rate fluctuations and external uncertainties that worsen their financial conditions.

Busan City announced this funding support plan on the 6th. Operational funds are used by businesses for daily operations such as purchasing raw materials, paying wages, and rent. In the current environment of increased exchange rate volatility and unstable import-export conditions, the financial pressure on small and medium-sized enterprises often increases first. The city government explained that this move aims to fill this funding gap, helping businesses to maintain production and sales, and continue operations.

This support also includes measures to delay repayment obligations. Businesses that use operational funds with maturing loans within this year can receive a six-month grace period for principal repayment, during which they can also enjoy an interest subsidy of 1.0% to 2.5%. The interest subsidy is a way for local governments to cover part of the loan interest, reducing the actual interest cost for businesses. In the current environment where interest rates still pose a burden to companies, this move aims to immediately reduce cash outflows and provide relief.

Businesses with funding needs, after review and recommendation letter approval from the Busan Economic Promotion Agency, can submit applications to 14 commercial banks. Additionally, Busan City will work with the Busan-Ulsan branch of the Korea Federation of Small and Medium Business and BNK Busan Bank to jointly develop a dedicated financial support plan for raw material joint procurement, providing policy funds of up to 100 billion Korean won. The support limit for individual enterprises is up to 800 million won, with well-established local companies rooted in the region eligible for up to 1 billion won. By pooling raw material procurement, the plan aims to lower purchase prices and achieve both financial support and cost savings.

Busan City has previously provided 2 trillion Korean won in special funds and 2 trillion Korean won in exchange rate care funds to respond to changes in the global economic situation, and is currently offering 8 trillion Korean won in funds to restore regional demand and support traditional commercial districts. Kim Hong-chul, head of the Digital Economy Office of Busan, stated that considering the increased operational burden due to external uncertainties, the scale of funding support has been expanded. The trend of increasing policy-based financial supply by local governments is likely to continue in the short term. Especially given Busan’s high export ratio and industry structure sensitive to raw material prices and exchange rate fluctuations, measures such as extending maturity and interest support are expected to continue being key tools to safeguard the regional economy.