Ministry cuts rates, extends repayment for flood-hit Geoje, Tongyeong firms
Version 2: Two further business outlets have picked up the same support measures, one of them noting that Geoje and Tongyeong were declared special disaster areas on Aug. 21, but no new facts, figures or disputes emerged.
In short
South Korea's Ministry of SMEs and Startups said it approved a disaster fund support plan for small businesses and SMEs in Geoje and Tongyeong, which were declared special disaster areas after heavy rain. For small businesses, the emergency management stabilization fund's loan ceiling rises from a maximum of 100 million won to 300 million won, the rate falls from 2.0% to 1.5% for direct loans, and repayment stretches from five years to 10 years. For SMEs the rate drops from 1.9% to 1.5%, with a ceiling of up to 1 billion won, and existing policy loans can receive a special maturity extension.
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The Ministry of SMEs and Startups said on Oct. 5 that it approved a disaster fund support plan for small businesses and SMEs in Geoje and Tongyeong, which were declared special disaster areas after heavy rain. Chosun Ilbo, Yonhap and Kyunghyang Shinmun reported that the decision was made at the ministry's first 2026 disaster countermeasures committee meeting, held on Sept. 28. Asia Economy reported that the two areas were declared special disaster areas on Aug. 21 because of the heavy rain. [ 1 , 3 , 4 , 5 ]
Under the plan, the ministry said small businesses that have obtained a disaster confirmation certificate will get the disaster exception on the emergency management stabilization fund: the loan ceiling rises from a maximum of 100 million won to 300 million won, the rate falls from 2.0% to 1.5% for direct loans and 1.4% for agent loans, and the repayment period extends from five years with a two-year grace period to 10 years with a five-year grace period. [ 1 , 4 , 5 ]
For SMEs, Yonhap and Kyunghyang Shinmun reported that the rate on the same fund falls from 1.9% to 1.5%, with a ceiling of up to 1 billion won and a repayment period unchanged at five years with a two-year grace period. The ministry said firms that had already received funds under the earlier, less generous conditions, along with existing policy loans, will be switched to the preferential terms, and Yonhap reported that the special maturity extension gives small businesses a maturity extension of up to one year plus a one-year grace period, and SMEs an extension of up to three years with a six-month deferral. [ 1 , 4 , 5 ]
Yonhap and Kyunghyang Shinmun reported that the preferential terms took effect for SMEs on Oct. 1 and are due to apply to small businesses from the third week of October. Applicants must report damage to their local government, obtain a disaster confirmation certificate, and contact the small business call center at 1533-0100 or the SME policy fund call center at 1811-3655. [ 4 , 5 ]
Minister Lee So-young said the ministry would “do all it can to execute the funds quickly so that small businesses and SMEs in Geoje and Tongyeong that suffered flood damage can shed their financial burden and restore their daily lives and business stability.” [ 1 , 4 , 5 ]
Why it matters
The measures lower borrowing costs and stretch repayment schedules for businesses in two southern coastal cities that were declared special disaster areas after heavy rain, which business and official outlets present as relief for firms facing financial strain. The plan also reaches firms that had already taken policy loans under the earlier, less generous terms, and it sets different start dates for small businesses and SMEs.
Key facts
- The Ministry of SMEs and Startups said it approved a disaster fund support plan for small businesses and SMEs in Geoje and Tongyeong, announced on Oct. 5. [ 1 , 3 , 4 , 5 ]
- The plan was adopted at the ministry's first 2026 disaster countermeasures committee meeting, held on Sept. 28. [ 3 , 4 , 5 ]
- For small businesses, the emergency management stabilization fund's loan ceiling rises from a maximum of 100 million won to 300 million won, and the rate falls from 2.0% to 1.5% for direct loans and 1.4% for agent loans. [ 1 , 4 , 5 ]
- The small business repayment period is extended from five years with a two-year grace period to 10 years with a five-year grace period. [ 1 , 4 , 5 ]
- For SMEs, the rate on the emergency management stabilization fund falls from 1.9% to 1.5%, with a ceiling of up to 1 billion won. [ 1 , 4 , 5 ]
- Firms that received funds under the previous conditions will be moved to the preferential terms, and existing policy loans can receive a special maturity extension. [ 1 , 4 , 5 ]
- The preferential terms took effect for SMEs on Oct. 1 and are due to apply to small businesses from the third week of October. [ 4 , 5 ]
- Applicants must report damage to their local government, obtain a disaster confirmation certificate, and contact the small business call center (1533-0100) or the SME policy fund call center (1811-3655). [ 4 , 5 ]
Confirmed by several sources
- The Ministry of SMEs and Startups approved a disaster fund support plan for small businesses and SMEs in the Geoje and Tongyeong special disaster areas. [ 1 , 3 , 4 , 5 ]
- The plan was adopted at the first 2026 disaster countermeasures committee meeting, held on Sept. 28. [ 3 , 4 , 5 ]
- Small business emergency fund rates fall from 2.0% to 1.5% for direct loans and 1.4% for agent loans. [ 1 , 4 , 5 ]
- The small business loan ceiling rises from a maximum of 100 million won to 300 million won and the repayment period from five years with a two-year grace period to 10 years with a five-year grace period. [ 1 , 4 , 5 ]
- SME emergency fund rates fall from 1.9% to 1.5%, with a loan ceiling of up to 1 billion won. [ 1 , 4 , 5 ]
- Firms that had already received funds under the earlier conditions will be moved to the preferential terms, and existing policy loans can be extended. [ 1 , 4 , 5 ]
- Geoje and Tongyeong were declared special disaster areas following heavy rain. [ 1 , 3 , 4 , 5 ]
- The special maturity extension allows small businesses a maturity extension of up to one year and a repayment deferral with a one-year grace period, and SMEs a maturity extension of up to three years with a six-month deferral, according to the Yonhap wire. [ 4 ]
Still unclear
- The scale of the flood damage and the number of affected businesses in Geoje and Tongyeong. No document gives damage figures or a count of affected businesses.
- The total amount of funding available under the plan or its cost to the government. No document states a total budget or an expected volume of lending.
- The date on which Geoje and Tongyeong were declared special disaster areas. Only Asia Economy gives a date, Aug. 21; the other documents do not state when the declaration was made.
What local media are saying
Timeline, local time
- Geoje and Tongyeong are declared special disaster areas after heavy rain, according to Asia Economy. [ 1 ]
- The Ministry of SMEs and Startups holds its first 2026 disaster countermeasures committee meeting and approves the disaster fund support plan, as reported by Chosun Ilbo, Yonhap and Kyunghyang Shinmun. [ 3 , 4 , 5 ]
- The preferential terms take effect for SMEs, according to Yonhap and Kyunghyang Shinmun. [ 4 , 5 ]
- Asia Economy, Newsis, Chosun Ilbo and Yonhap publish reports on the support measures. [ 1 , 2 , 3 , 4 ]
- Kyunghyang Shinmun publishes its report on the same measures, including the terms and application procedure. [ 5 ]
- Korea Economic Daily publishes a report headlined on up to 1 billion won in disaster support for SMEs in Geoje and Tongyeong. [ 6 ]
- The preferential terms are due to apply to small businesses, according to Yonhap and Kyunghyang Shinmun. [ 4 , 5 ]