President Kim Hak-do of Korea SMES and Startups Agency (KOSME) gives a policy briefing on KOSME’s supporting SMEs’ overseas market entry at the Seoul Government Complex on July 30.

The Korea SMEs and Startups Agency (KOSME) plans to expand its emergency management stabilization fund to extend a helping hand to SMEs grappling with the effects of the COVID-19 crisis.

KOSME is introducing a self-rescue program to help financially strapped companies restructure themselves on a voluntary basis.

KOSME President Kim Hak-do, marking his first 100 days in office, said, “KOSME will provide full support to help SMEs and venture companies overcome a management crisis, caused by a paradigm shift in the restructuring of industries by building social safety network for SMEs.”

KOSME raised its emergency management stabilization fund from 100 billion won to 700 billion won as COVID-19, caused by the novel coronavirus, hit the nation.

The agency decided to increase the fund by 300 billion won to a combined 1 trillion won in August.

The additional 300 billion won will go to SMEs struggling with ramifications from the pandemic.

Even SMEs, facing a liquidity crisis for a short period of time, will qualify for the financial support from KOSME’s emergency management stabilization fund by easing guidelines on its beneficiaries.

The amount of paperwork required for beneficiaries has reduced from seven to two pages.

A self-rescue program is in place to help companies, facing with a risk of bankruptcies, restructure themselves on a voluntary basis. Prominent SMEs with technologies, facing a short-term liquidity crisis, will be offered with financial support such as provision of liquidity, rescheduling of borrowings, and lowering their interest rates.

SMEs whose total borrowings, including loans from KOSME and commercial bank, stand at less than 10 billion won are qualified to benefit from the program.

KOSME plans to focus on minimizing corporate values like manpower restructuring and disposal of core assets in the course of restructuring.

The agency plans to extend up to 300 billion won or a maximum of 90 percent of the cost of establishing a corporate restructuring plan. Companies have so far shouldered costs related to due diligence paid to accounting firms.

A view of KOSME headquarters. (Photos: KOSME)