[global economic times]  As the end of the year approaches, consulting companies targeting government start-up and research and development (R&D) support projects for next year are on the rise again. It was found that entrepreneurs were approached online, offering to provide advantageous methods for selecting a business for a certain fee. Policy fund brokers masquerading as government agencies also continue to receive criticism.

A company with the name '0000 Partners' recently posted an advertisement on social networking services (SNS) to recruit prospective entrepreneurs in preparation for government support projects in 2025. With the goal of receiving 100 million won in start-up support, an 8-week training course was held to prepare for the preliminary and initial start-up package, a start-up support project of the Ministry of SMEs and Startups, and the Youth Entrepreneurship Academy.

Citing his history of securing 2 billion won in government support while running a startup for 10 years, the company representative said, “I will repay you with a value of more than 1 billion won for the business plan I learned with just 2 million won.” Previously, it is believed that he received a request to write a business plan from Kmong, a freelance job search platform, for a fee of around 1 million won. Another company B also promoted how to write a guidebook for writing a business plan in preparation for the start-up support project.

The activities of these companies, which aim to provide training on how to write a business plan, cannot be concluded as illegal. However, some point out that there is a problem with engaging in profit-making activities under the pretext of receiving government subsidies.

A startup representative said, “Government-supported projects are often crowded at the beginning of the year, so if you fail once, you have to wait for nearly a year again.” He added, “Even if it’s paid, it’s true that it’s tempting if it helps you select a government-supported project.”

The problem of brokers approaching small and medium-sized businesses and small business owners claiming to help them with government policy funds still persists. Brokers are well known for receiving deposits under the pretext of providing customized consulting on policy funds or encouraging people to sign up for insurance in return for success.

The National Assembly has consistently called for improvement. During a government audit last year, People Power Party lawmaker Kim Seong-won went directly to the address of a company advertised on the Internet as 'Small and Medium Business Management Support Center' and discovered that it was actually conducting insurance business under a different name. He then asked Kang Seok-jin, chairman of the Small and Medium Venture Business Corporation, to “take an active role.”

However, this company is still thriving. The website introduces policy funds for small and medium-sized businesses and displays the logos of policy funds such as the Small and Medium Business Corporation, Korea Technology Finance Corporation, and Credit Guarantee Fund.

To prepare for such cases, a system is being implemented to eradicate private companies impersonating government agencies or unfairly interfering with policy funds. However, questions are raised about its effectiveness. The current Small and Medium Business Promotion Act stipulates that a fine of up to 3 million won will be imposed if a name similar to SME is used.

In July of last year, at a subcommittee of the National Assembly's Trade, Industry, Energy, Small and Medium Venture Business Committee, the Ministry of SMEs and Startups admitted that overall statistics on complaints and damages according to the ban on the use of similar names were insufficient. In addition, according to data submitted by the office of Democratic Party lawmaker Heo Seong-moo from the Ministry of SMEs and Startups, the number of cases of third-party intervention in policy funds by SMEs, Shinbo, and the Small Business Market Corporation over the past five years was only 20.

An official from an agency affiliated with the Ministry of SMEs and Startups said, “We have been aware of the problem of brokers under the pretext of brokering policy funds for a long time, but there are limits to specifically proving illegality.” He added, “By simplifying the policy fund application process, we will prevent the search for a third party and prevent unfair practices.” “We will strengthen publicity to eradicate intervention,” he said.

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