More than 40% of small business owners fear re-entering the lockdown

16/ 09/ 2020

More than 40% of small business owners fear re-entering the lockdown according to the results of the EBA express survey conducted among representatives of small and micro businesses who participates in the Unlimit Ukraine project. Thus, 42% of respondents said that their business is not prepared for another strict lockdown scenario. Another 29% of entrepreneurs say they are ready for the situation to worsen, and another 29% are hesitant about their preparedness for these developments.

In the event of a second wave of coronavirus and, consequently, the re-introduction of stringent quarantine measures by the state, most small businesses will have to close or reduce their business, as well as seek help from the state. In this context, is extremely important to provide simplified access to affordable credit for entrepreneurs.

In early February 2020, a state credit program “Affordable Loans 5-7-9%” was launched at the initiative of the President of Ukraine and the Prime Minister of Ukraine to stimulate the development of small and micro businesses by facilitating their access to credit. More than six months have passed since the launch of Affordable Loans, so we decided to ask the Unlimit Ukraine community for their opinion on the state loan program in question.

Almost every fourth entrepreneur, namely 27%, was denied participation in the program. Besides, only 11% of respondents managed to get a loan, and 10% are still waiting for a decision on their application. Another 25% only plan to apply for the program, 16% – do not plan due to their non-compliance with the criteria, and 11% – due to lack of interest.

At the same time, 89% of entrepreneurs turned to the state bank for this program and only 11% – to commercial ones. When it comes to the amount, small loans predominate. Thus, 50% of entrepreneurs managed to get a loan of up to UAH 500,000, 20% – from UAH 500,000 to UAH 1 million, 17% – from UAH 1 million to UAH 3 million and another 13% received a loan of over UAH 3 million.

Top 3 goals for which entrepreneurs plan to spend loans received under the program “Affordable loans 5-7-9%”:

  • Acquisition and/or modernization of fixed assets;
  • Working capital financing within the investment project;
  • Replenishment of working capital to cover fixed costs (rent, salaries to employees, insurance payments, etc.).

During the program participation period, 59% of companies reported that they did not change the number of staff, and only 18% of businesses managed to create two or more jobs.

Entrepreneurs who failed to participate in the program report the following most common reasons. First, the complicated bureaucratic procedure for obtaining this state assistance, secondly, insufficient creditworthiness to receive assistance, and thirdly, non-compliance with certain criteria for receiving assistance.

Small business suffers too much from the consequences of the pandemic, and therefore needs increased assistance from the state. We hope that feedback from entrepreneurs will help improve the conditions and opportunities of the program and thus give access to credit to even more small businesses. In addition, it is important that government support is not limited to simplifying access to finance but provides comprehensive measures for the growth and scaling of small businesses.


For the reference:

The survey was conducted from August 31 to September 15, 2020, among the participants of the Unlimit Ukraine project. Altogether, 62 entrepreneurs (owners of small and medium businesses) participated in the survey.

Unlimit Ukraine is a small business and microbusiness development platform created on the basis of the European Business Association. The project provides comprehensive support for small and microbusiness through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the ownership of FOP without limitation of activities. Today, Unlimit Ukraine includes more than 1865 participants.


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