The Ministry of Economy is updating the conditions for the state support program – investment loans will be cheaper.
We recently wrote that Russia still has three main programs for concessional lending to small and medium-sized businesses. A loan can be obtained for investments, replenishment of working capital or for other purposes. But With April, they were issued at prohibitive rates of 15% per annum, and only recently have rates started to come down. Now, the Ministry of Economy has announced that loans for manufacturing SMEs will be issued at reduced rates.
Preferential loans can be obtained by small and medium-sized entrepreneurs as part of an updated lending program. The initiative will make it possible to issue loans at 3% for medium-sized businesses and at 4.5% per annum for small businesses for investment purposes in the SME Corporation. Such proposals have become especially relevant for Russian entrepreneurs against the backdrop of the economic crisis that formed in the spring of 2022. With the help of concessional lending from SMEs, owners of small and medium-sized businesses can receive up to 2 billion rubles.
Let us recall that despite the creation of three large-scale programs to support small and medium-sized businesses, interest rates have not yet been reviewed. For the first time, the possibility of lowering annual rates was discussed quite recently. But now it has become known that rates will be reduced even more for manufacturing enterprises. (up to 3% or 4.5% per annum)with a grace period of up to five years.
The reduction in interest rates under the proposal from the SME Corporation is indeed necessary, also due to considerations of benefits for enterprises. Today, you can get a lot of different loans from banks at about the same rates as under state programs (up to 15% per annum), as the situation in the economy has stabilized, and the key rate of the Central Bank has decreased.
Therefore, the Ministry of Economy considers it urgent to create more favorable conditions for business by lowering rates even more. According to the SME Corporation, the volume of investments in this area by the end of 2022 will amount to about 50 billion rubles. Already To date, the Central Bank, together with the SME Corporation, has issued 4,300 loans totaling 88 billion rubles. It is also noted that a reduction in the annual rate to 3% is available to owners of medium-sized businesses, and up to 4.5% – to small entrepreneurs.
It is interesting that recently many experts reported on the reduction of the rate to 5-6.5% per annum. An even greater decline is likely to attract some more entrepreneurs to the concessional lending program from SMEs.