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IBK Industrial Bank Unveils $1.48 Billion Initiative to Empower Early-Stage SMEs
SEOUL — On October 21, the Industrial Bank of Korea (IBK) officially announced a groundbreaking "Special Support Program for Facility Investment," valued at KRW 2 trillion (approximately $1.48 billion). Set to launch on October 25, this forward-thinking initiative is designed to propel small and medium enterprises (SMEs) in operation for less than seven years. The bank aims to support startups in acquiring their first business facilities while fostering operational stability.
The program offers a multifaceted approach, including funding for purchasing business premises, securing working capital, and providing expert consulting services. By alleviating the financial strain associated with renting or purchasing facilities, the initiative seeks to empower startups to establish a solid foundation for long-term growth.
Interest Rate Incentives and Facility Funding
To make facility acquisition more accessible, IBK has structured attractive interest rate discounts for qualifying businesses. Companies purchasing facilities through this program could see interest rate reductions of up to 1.5 percentage points (pp). For added benefits, IBK is collaborating with local governments that provide secondary interest subsidies, further reducing rates by up to 3.5pp. The result? SMEs could access ultra-low-interest loans at rates as low as the 1% range.
Of the total program funding, KRW 1.8 trillion has been earmarked specifically for facility investments, enabling startups to secure their first operational base. The program's rollout will initially begin in South Gyeongsang Province before expanding to Gyeonggi Province and other regions, thereby broadening its reach to benefit more businesses nationwide.
Inclusive Support for Working Capital Needs
In addition to facility funding, IBK is addressing other critical startup requirements by dedicating KRW 200 billion toward working capital. These funds will be allocated through partnerships with Korea Credit Guarantee Fund and Korea Technology Finance Corporation, allowing startups to manage essential expenses like raw materials and payroll.
Eligible SMEs can benefit from interest rate discounts of up to 1.3pp and a 0.5pp reduction in guarantee fees, further lowering the cost of obtaining financial support. This financial assistance comes with access to specialized consulting services aimed at building robust foundations in areas such as production workflows, organizational management, and financial planning.
Driving Growth and Entrepreneurial Success
Kim Sung-tae, CEO of IBK, highlighted the symbolic and practical significance of the program. "Securing a first business facility is akin to an individual purchasing their first home—it’s a monumental step forward," said Kim. "IBK is committed to providing holistic support to invigorate the startup ecosystem and fuel entrepreneurial success."
With its comprehensive offerings, this initiative is poised to be a transformative milestone for early-stage SMEs, enabling them to overcome initial hurdles and pursue sustainable growth.
This state-of-the-art program serves as a beacon for entrepreneurs eager to take their businesses to the next level, affirming IBK’s commitment to fostering innovation, economic development, and a thriving startup ecosystem in South Korea.
