The Financial Services Commission will enhance tailored financial support to reduce the debt burden of small business owners and self-employed individuals. Small business owners in arrears will be assisted in their quick recovery through the 'New Start Fund,' and the primary focus is on supporting interest reductions for those at risk of default or who have closed their businesses.
◇ Support of 700 billion won for 250,000 small businesses in arrears or closed
The Financial Services Commission noted during the '2025 Economic First Quarter Key Issues Resolution Meeting' held on the 8th, "We will pursue policies for finance supporting economic recovery." The banking sector will provide financial support worth 700 billion won to small businesses in arrears or closed from March to July. The commission estimates that this funding will reduce the interest burden on loans totaling 14 trillion won borrowed by approximately 250,000 small businesses.
Even small business owners who are normally repaying loans can switch to long-term installment repayment products for up to 10 years if they feel they may not be able to repay on time. In that process, they can also reduce their interest burden by getting lower interest rates. This applies to those with a credit rating of 6 or lower or whose representative has an annual income of 35 million won or less.
Additionally, closed small business owners can repay remaining loans gradually at a low interest rate of around 3% for up to 30 years (for loan balances of 100 million won or less). Until now, if a business ceased operations, they generally had to repay the entire loan amount at once.
The support scale of the debt adjustment program 'New Start Fund,' aimed at helping self-employed individuals in arrears, will be expanded from the existing 30 trillion won to 40 trillion won, and the eligibility criteria and application period will be enlarged. Specifically, the application eligibility for the New Start Fund will be expanded from small business owners and self-employed individuals operating from April 2020 to November 2025, to those operating from April 2020 to June 2026, and the application period will also be extended by about one year until December 2026.
The Financial Services Commission will also implement reductions in credit card fees for small business owners starting in February and improve the public disclosure system for easy payment fees. Additionally, it will make it mandatory for electronic payment service providers to manage settlement funds separately to protect sales.
◇ Reduce closely related financial expenses…Half reduction in early repayment fees
The Financial Services Commission will also work towards reducing national financial expenses to aid the recovery of private consumption. From the 13th, the early repayment fees for bank loans will be lowered to half of the current level.
The Financial Services Commission amended supervisory regulations in July last year to set fees only within the scope of losses and administrative expenses borne by the banking sector. A simulation reflecting actual costs was conducted for major commercial banks, and as a result, early repayment fees for mortgage loans currently standing at 1.2% to 1.4% could be adjusted to around 0.6% to 0.7%, while those for credit loans could be adjusted from 0.6% to 0.8% down to around 0.4%.
Furthermore, to ensure that the effects of rate cuts are felt, the convenience of applying for the right to request interest rate reductions will be increased, and the appropriateness of managing and operating the bank credit evaluation system will be checked. Measures will be strengthened to prevent excessive increases in automobile insurance and actual cost insurance premiums.