Government to Inject 39 Trillion Won Ahead of Lunar New Year... Record Liquidity Support for Small Businesses and SMEs [Lunar New Year Livelihood Stabilization Measures]

[The Financial News] The government will provide 39 trillion won in new funding to support liquidity for small business owners and small and medium-sized enterprises (SMEs) over the Lunar New Year holiday period. To backstop funding demand, it will also extend the maturity of existing loans and guarantees totaling 58 trillion won.
On the 28th, the government announced the "2026 Lunar New Year Livelihood Stabilization Measures," which include these steps. The package focuses on easing cash-flow strains before the holidays by expanding short-term liquidity supply and front-loading various public payments.
First, the government will provide the largest-ever volume of holiday funds for small business owners and SMEs. It will offer 39.3 trillion won in new loans and guarantees, while extending the maturity of existing loans and guarantees worth 58 trillion won by one year.
Merchants in traditional markets will receive 5 billion won in low-interest funds over roughly two months before the Lunar New Year break. Around 2.3 million micro and small business owners will be given vouchers worth up to 250,000 won that can be used to pay utility bills such as electricity, gas, and water. Borrowers paying interest rates of 7% or higher will be helped to refinance into low-interest loans at 4.5%, and 2.5 trillion won in conversion guarantees will be supplied to extend repayment periods by up to five years.
Tax relief will be provided in parallel. For small business owners and SMEs facing management difficulties, the government will accelerate refunds of value-added tax and customs duties. It will also operate the "Unfair Subcontracting Reporting Center" to ensure subcontracting payments are made on time before Lunar New Year.
Financial support for low-income and vulnerable groups will also be expanded. Over the two months around Lunar New Year, the government will provide about 1.1 trillion won in policy-based inclusive finance. This includes 588.3 billion won in standard Sunshine Loan guarantees, 388.3 billion won in special guarantees, and 50 billion won in Sunshine Loan Youth products for young people. It will supply 33.3 billion won in loans designed to prevent reliance on illegal private lending and lower the interest rate on these loans to the 5–6% range to reduce the actual burden on borrowers. Daily construction workers will be able to obtain interest-free livelihood stabilization loans of up to 10 million won, using their retirement mutual aid benefits as collateral.
Support for workers suffering wage arrears will also be strengthened. The interest rate on the Wage Arrears Settlement Support Loan will be temporarily cut by up to 1 percentage point, and the processing period for subrogated payment of unpaid wages by the state will be shortened from 14 days to 7 days. A total of 81.7 billion won in Earned Income Tax Credit (EITC) and Child Allowance will be paid before Lunar New Year, earlier than the statutory deadline. Under the senior employment program and other direct job creation programs, more than 830,000 people will be hired early in January, and 1.6 trillion won in welfare benefits, including the Livelihood Benefit and Disability Allowance, will also be disbursed ahead of schedule.
Lee Joo-seop, Director General for Public Livelihood and Real Economy Policy at the Ministry of Finance and Economy, stated, "We have expanded liquidity support for small business owners and SMEs by 300 billion won compared with last year, and we plan to ensure smooth provision of policy-based inclusive finance for vulnerable groups."


hippo@fnnews.com Kim Chan-mi Reporter