The Ministry of SMEs and Startups and the Korea SMEs and Startups Agency (KOSME) said on the 10th that they are supporting the future growth of small and midsize corporations through growth-sharing loans.
The growth-sharing loan is policy funding in which the Korea SMEs and Startups Agency (KOSME) acquires convertible bonds (CB), redeemable convertible preferred shares (RCPS), and convertible preferred shares (CPS) issued by small and midsize corporations with strong growth value and high initial public offering (IPO) potential, providing up to 2 billion won per corporation.
In particular, it supplies liquidity to corporations outside the capital area and startups that find it difficult to raise sufficient funds through private finance alone, serving as a primer for growth.
In practice, FRTek, which received support through a growth-sharing loan, is a construction materials manufacturing corporation established in Feb. last year, and it secured commercialization funds and laid a foundation for growth by receiving new market entry support funds in the form of a growth-sharing loan. Based on this, FRTek proved the technological prowess of an eco-friendly new material (GFRP reinforcement) that replaces conventional rebar, and successfully established itself in the market by posting sales of 1.3 billion won in its early startup stage.
Kim Il-ho, director of corporate finance at the Korea SMEs and Startups Agency (KOSME), said, "The growth-sharing loan is policy finance that focuses on corporations' future growth potential rather than their current financial status," adding, "We will continue to identify small and midsize corporations with growth potential and provide the funds needed for commercialization and market entry in a timely manner."
The growth-sharing loan is available year-round and can be applied for through the Korea SMEs and Startups Agency (KOSME) website until the budget is exhausted.