May Marks the Return of the Policy Funding Season
The first half of each year is the period when government support programs operate most intensively. With annual notices entering their execution phase and deadlines for the first half approaching, the first week of May serves as a critical juncture where schedules for supporting startups, small businesses, and SMEs converge all at once.
As of May 2026, the scale of policy funds and support programs operated by the Ministry of SMEs and Startups (MSS) is at an all-time high. Combining 3.4645 trillion won based on the integrated startup support program notice, 4.4313 trillion won in SME policy funds, and 5.4 trillion won in small business support budgets, the total funds executed by the single MSS department during this period well exceed 13 trillion won.
Through the 2026 integrated startup support program notice, the MSS has allocated a budget of 3.4645 trillion won—a 5.2% increase from the previous year (3.2940 trillion won)—covering a total of 508 programs across 111 institutions. Simultaneously, in the first week of May 2026, 55 startup support programs targeting prospective founders and startups were unveiled nationwide.
In this KBR Policy Insight, we practically categorize the major funds and support programs currently open and being executed between May 1 and May 6 into three pillars: startup support, SME policy funds, and small business loans and livelihood funds. We will examine which programs are currently open, who is eligible to apply, and when they close.
1. Startup Ecosystem Pillar: 55 Programs Unveiled in May and the Framework of the Integrated Notice
55 Programs Currently Unveiled, Covering All Regions and Stages
A distinctive feature of the 55 startup support programs unveiled in the first week of May is that they include a large number of region-based programs, such as support for the growth of manufacturing startups in Gwangju, recruitment of tenant companies for the mid-to-older generation technology startup center in Incheon, and recruitment of tenant companies for the Sangji University startup incubator center in Wonju, Gangwon Province.
The scope of support spans the entire process from initial financing to the scale-up stage, and programs supporting prototype production, patent, and certification costs up to 7 million won also stand out. The Gangnam-gu Single-Person Creative Enterprise Support Center in Seoul helps early-stage founders secure a physical foundation by providing independent paid offices.
Educational programs aimed at fostering talent in specific fields, such as 'Recruitment of Upcycling Sewing Design Trainees,' are also being operated, expanding the horizons of the startup market in diverse ways. Regionally, the designs reflecting the characteristics of each regional industry stand out, such as manufacturing startups in Gwangju, middle-aged technology startups in Incheon, and university-linked startup incubation in Gangwon.
Because application deadlines vary by program, individual confirmation through the 'K-Startup' portal or the 'Moduui Changup' website is essential.
Framework of the Annual Integrated Notice: 3.4645 Trillion Won, 508 Programs
Looking at program types, loan programs account for the largest share at 1.4245 trillion won (41.1% of the total), followed by research and development (R&D) at 864.8 billion won, and commercialization at 815.1 billion won. These three types of programs account for 89.6% of the total budget.
By institution, 15 central ministries are promoting 88 programs and have been allocated 3.2740 trillion won. The MSS accounts for the largest share (93.9%) at 3.0734 trillion won, followed by the Ministry of Science and ICT (84.6 billion won), the Ministry of Culture, Sports and Tourism (40 billion won), and the Ministry of Agriculture, Food and Rural Affairs (31.7 billion won).
The Financial Services Commission and the Korea Forest Service are participating newly starting in 2026, promoting startup guarantee programs and youth forestry startup support programs, respectively. The youth startup sector has also been notably strengthened. The youth startup support budget is 257.5 billion won, an increase of 80.1 billion won from the previous year.
Systemic Changes: Greater Flexibility in Fund Execution, Stricter Sanctions for Misconduct
Along with this integrated notice, the MSS has revised the 'Startup Support Program Management Guidelines' to promote institutional improvements such as expanding flexibility in fund execution for startups, supporting intellectual property costs, and supporting technology infringement litigation insurance premiums.
The period of restriction on participation for misconduct will be extended from the existing 3 years to 5 years, and the management system for equipment built with government support funds will be strengthened. From a startup's perspective, this change is twofold: while fund utilization expands due to increased execution flexibility, sanctions against improper use have become much stricter.
A 5-item participation restriction is practically a market-exit penalty in a startup's lifecycle. Expenditures for purposes not specified in the business plan must be strictly avoided.
Status of Major Programs by Stage
Prospective founders should look at the Prospective Founder Package first. It supports the startup commercialization preparation stage for prospective founders with innovative technology startup ideas, providing up to 80 million won in commercialization funds required for prototype production, marketing, and intellectual property filing and registration.
For companies that have exceeded 3 years and are within 7 years of founding, the Startup Leap Package is suitable. The Startup Leap Package is divided into four types: large-corporation collaboration type, general type, investment-linked type, and deep-tech sector. In the case of the investment-linked type, investment linkage is included with up to 200 million won in commercialization funds.
The deep-tech sector selects around 100 companies and also supports up to 200 million won. Programs targeting the fabless (semiconductor design specialized company) sector also made it to the May notices. The Deep-Tech Startup Project Fabless Comprehensive Support Program is currently recruiting, providing integrated support from system semiconductor design to commercialization.
2. SME Pillar: 4.4313 Trillion Won in Policy Funds, How They Are Moving Now
This Year's Keywords are 'Selection and Concentration' and 'AI/DX Preference'
According to the 2026 SME policy fund operation plan announced by the MSS, the 4.4313 trillion won policy fund is divided into 4.0643 trillion won in loans and 367 billion won in secondary subsidization for private financial institution loans. Eligibility is divided by the company's growth stage, such as the startup stage, growth stage, and restart stage.
The MSS allocated 1.6 trillion won for innovative startup commercialization funds targeting startups within 7 years of founding, and 1.7 trillion won for new market entry support funds and new growth foundation funds for growth-stage companies. Regional allocation is also a feature. More than 60% of the 4.4313 trillion won will be intensively supplied to non-metropolitan companies, and financial support for innovative growth sectors such as AI and semiconductors, as well as the K-beauty industry, will also be expanded.
Structure Favorable to DX and ESG Companies
The keywords for this policy fund this year are 'selection and concentration.' Interest rate reduction benefits are concentrated on companies attempting to introduce digital transformation (DX) and ESG management, as well as general manufacturing. Companies introducing smart factories or practicing carbon neutrality can receive additional rate deduction benefits from the base interest rate, significantly saving financial costs.
The 'super-gap and new industry sectors,' which receive the most powerful preferential benefits in the 2026 policy fund screening—a 10 billion won limit and interest rate reductions—have been specifically designated.
These include system semiconductors (fabless, packaging, related sensor manufacturing), future mobility (electric/hydrogen vehicle parts, autonomous driving SW, drones), eco-friendly/energy (waste battery recycling, carbon capture technology), and robotics/AI (service robots, AI-based big data analysis solutions). Companies with ambiguous industry classifications should not give up yet.
Even if the industry classification on the business registration certificate is ambiguous, if it is proven that actual sales are generated in the above sectors, they can be recognized as 'new industry-operating companies' and become prioritized for support.
Debt-to-Equity Ratio and Application Qualification Notes
High-performing companies with assets exceeding 70 billion won or a credit rating of BBB or higher, which can sufficiently utilize private banks, are excluded from policy fund support. On the other hand, startup companies within 7 years of founding are not subject to debt-to-equity ratio restrictions. Software development businesses can also be recognized as root industries as of 2026, and regional companies are given bonus points as they are classified as regional specialized industries.
Systemic Changes: Expanded Number of Support Times, Introduction of One-Strike Out
The system, which previously allowed support up to a maximum of 3 times over 5 years, has been improved to allow up to 5 times for companies selected for the Deep-Tech Startup Project and facility-investing companies among those in key support sectors. In addition, a 'one-strike-out system' will be introduced to restrict loan applications if facilities introduced with policy funds are used for non-intended purposes. Through the early warning system, distress in policy fund-supported companies will be checked in advance, and repayment deferrals and maturity extensions will be implemented when necessary.
3. Small Business Pillar: Record-High 5.4 Trillion Won, AI and Digital Transformation as Core
Budget Scale and Structure
The MSS 2026 small business budget totals a record-high 5.4 trillion won. Among this, programs available for prospective founders and small business owners span 7 sectors and 26 programs, totaling 1.3410 trillion won, a substantial 64% (524 billion won) increase from the previous year.
The support sectors are broadly divided into seven paths. Fostering enterprise-like small business owners, supporting small business growth, supporting specialized small craftsmen, revitalizing local commercial districts, strengthening small business digital capabilities, easing small business management burdens, and supporting small business resurgence form the core pillars.
Small Business Policy Fund Loans: General, Special, and Emergency Management Stabilization Funds
Small business policy fund loan programs consist of general, special, and emergency management stabilization funds, credit vulnerability funds, debt refinancing, re-challenge special funds, disabled enterprise support funds, youth employment-linked funds, and growth foundation funds.
Applications can be made either online through the Small Business Policy Funds website or by visiting Small Enterprise and Market Service (SEMAS) regional centers (78 locations nationwide). Small business owners in urgent need of operating funds should review emergency management stabilization funds first. Their interest rates are lower and procedures are simplified compared to general commercial bank loans, making them advantageous for securing immediate liquidity during cash flow crises. Inquiries can be made to the Integrated SME Call Center (1357) or the Integrated Small Business Call Center (1533-0100).
AI Utilization Support: New 2026 Program
The Innovative Small Business AI Utilization Support Program is a newly introduced program for 2026, aimed at helping reduce costs and increase work efficiency by utilizing AI technology. As digital transformation items are strengthened starting in 2026, including new technology introduction plans, such as automating customer inquiries with AI chatbots, in the business plan will work to your advantage during screening.
Hope Return Package: From Business Closure to Re-starting
The Hope Return Package program is a system that provides one-stop support ranging from business closure to resurgence, employment, and startups. In 2026, its budget will increase by 60.5 billion won compared to the previous year, and when re-starting a business after closure, founders can receive up to 20 million won in startup support funds. Store demolition costs will also be expanded up to 6 million won, targeting a total of 30,000 cases of support.
4. Supplementary Budget Livelihood Funds: Consumption Promotion Directly Linked to Small Business Franchises
High Oil Price Damage Support Fund 2nd Round: Applications Open Starting May 18
Aside from MSS policy funds, supplementary budget-based livelihood support funds will also begin full execution in May. Small business owners should pay attention, even if they are not direct beneficiaries, in that consumption will be indirectly funneled through their merchant stores.
The core livelihood measure of the supplementary budget bill approved at the Cabinet meeting on March 31, 2026, is the high oil price damage support fund. Totaling 4.8 trillion won, it will be differentially distributed to approximately 35.77 million citizens in the bottom 70% income bracket to ease the burden of soaring oil prices and inflation caused by the prolonged Middle East war.
Vulnerable groups such as basic livelihood recipients, next-to-bottom income families, and single-parent households can apply starting April 27, 2026, while general households in the bottom 70% income bracket can apply starting May 18. The second application period runs from 9:00 AM on May 18, 2026, to June 5. To prevent server overloads, a 5-day rotation application system based on the last digit of the birth year will be applied.
Disbursements will be made sequentially starting from late June. From the perspective of small business owners, this fund acts as an influx of consumption rather than direct benefits.
Usage is restricted to small business franchises with annual sales of 3 billion won or less. It can be used at traditional markets, neighborhood supermarkets, restaurants, hair salons, hospitals, and pharmacies, but cannot be used at online shopping malls, large supermarkets, or adult entertainment establishments.
The support funds can only be used until August 31, 2026. It is advisable to check in advance whether your business is registered as a small business franchise and whether a local currency terminal is installed.