SMEs ministry extends maturity on loans to TMEP victims by one year

South Korea's SMEs ministry said Wednesday it will grant a one-year special maturity extension on policy loans to small companies hurt by the 2024 TMON and Wemakeprice collapse, easing a repayment schedule that was about to begin.

The Ministry of SMEs and Startups said the measure covers businesses that received emergency business stabilization funds through its TMEP victim support program between September and December 2024. Those loans carried a two-year grace period followed by three years of principal repayment, and the grace periods are now expiring in sequence, raising the prospect of heavier repayment burdens for the affected firms.

Under the extension, borrowers can push back the start of principal repayment by one year. The ministry will not apply a minimum principal repayment condition and will not charge the additional interest rate normally attached to a maturity extension.

Companies with a short-term overdue payment of within 30 days on a SME policy loan remain eligible.

Applications open Wednesday and run through Feb. 26, 2027. Details are available on the website of the Korea SMEs and Startups Agency, and inquiries can be made to the agency's regional offices or the integrated SME call center at 1357.

"I expect this measure to help reduce the temporary liquidity burden on small companies damaged by the TMEP situation and to support their return to normal operations," said Sim Jae-yun, the ministry's director-general for global growth policy.