5-7-9% and more: opportunities for state funding

29/ 04/ 2020

Yesterday, April 28, the European Business Association held an online meeting “Funding your business” to discuss the possibilities of public financing, the first results of the 5-7-9% public loan program, and other ways of attracting financial resources.

View the meeting on Facebook

Thus, participants learned about the latest changes to the 5-7-9% program. This public loan program was expanded to meet the need of business for extra funds in times of crisis. New conditions imply increasing the maximum loan amount from 1.5 million UAH to 3 million UAH, delaying the repayment of the loan body, expanding the target use of the loan, refinancing of loans. Companies that already receive state funding from other programs are also allowed to apply for these loans – there are no restrictions on the number of programs in which one company can participate, but the total amount of state aid should not exceed 200,000 euros (including rate compensation, credit guarantee, etc.).

Despite the quarantine regime and slowdown in economic activity, demand for business loans in March increased by 20% compared to last year, and in April it remained at the same level as in 2019. Unfortunately, despite the high demand, not all companies can participate in the 5-7-9% program due to non-compliance with its requirements. Also, loan terms vary depending on the bank.

Thus, banks are willing to work with companies in healthcare, science, communications, IT, commerce, manufacturing and agriculture, and more. At the moment, the largest number of loans were approved for the enterprises of the agrarian sector and retail trade. It was noted that the success of the loan application depends heavily on a detailed business plan, sound business reputation, and impeccable credit record.

At the same time, the business noted the slow loan application process. Representatives of the banks participating in the program clarified that it takes 8-11 days to approve the application for the state funds, without taking into account the time for collecting the necessary documents. However, due to the quarantine, there may be a delay in the application approval process by the bank. Also, in the current situation, each bank carries out its own risk management and may decide to suspend the issuance of loans, including those under the 5-7-9% program.

Apart from 5-7-9%, other financial sources such as grants, sectoral support programs, and individual banking options were also mentioned. In the coming days, there will be a launch of “New Money” – a state program of preferential loans aimed at providing entrepreneurs with cheap money to overcome the crisis. Among the implemented measures, it is worth noting the public unemployment assistance in the total amount of UAH 6 billion. Under this program, the state partially compensates the workers’ salaries for small and medium-sized enterprises to avoid redundancies. The Government also plans to attract additional funding from the EU and other international organizations to implement new business support programs in Ukraine.

The European Business Association would like to thank the participants for their professional dialogue and detailed information on public business finance programs. We hope that small and micro-businesses will be able to develop and expand as they have access to affordable financial resources. We are also grateful to our partner, Fondy, for sharing information on online acquiring services that help efficiently to manage international funds and facilitate communication with foreign banks. More information:

For the reference:

Dmytro Romanovych, Deputy Minister of Development for Economy, Trade and Agriculture of Ukraine, Nataliia Butkova-Vitvitska, Director of  Micro, Small and Medium Business Department of Oschadbank, Viktor Kharkovets, Head of Microbanking of the Department of Small Business Development of PUMB.



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