Prikhodko&Partners
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Grants and attracting investment Business financing

Iryna Bazylyk

Grant manager, investment consultant

E-mail

grytsai@prikhodko.com.ua

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A leading specialist in attracting credit and financing for medium and large businesses. Grant is a manager specializing in grants for small and medium-sized businesses

Business financing

Attracting funds and other resources to the business is possible thanks to various financial instruments. Business financing today is possible both from investors’ funds and through receiving support from the state or local budget.

The amount received within the framework of one of the selected business support programs can be spent to cover current costs and investments in future development.

More details on how you can get funding and what are its main types in this article.

What are the types of business financing in Ukraine?

State/International Grant Programs

A grant should be understood as non-refundable financial assistance from the government and international funds, which is provided within the framework of a certain project and only to those businesses that meet the criteria of the program.

Given the variety of grant programs and requirements for entrepreneurs, it is difficult to choose a single approach to prepare for them.

In recent years, the following grants have gained the greatest popularity:

firstly, under the project eWork for Small Business (Own Business, Grant for Veterans and Members of Their Families, Grant for the Development of the Processing Industry);
secondly, from the European Commission (the most popular among Ukrainians is Horizon Europe);
thirdly, from other international organizations, in particular USAID (temporarily not working on the territory of Ukraine), IOM, GIZ.

Lending 5-7-9

Affordable Loan 5-7-9 is a government support program that provides funds to small and medium-sized businesses and operates in 46 state-owned banks.

It can be obtained from banking institutions such as PrivatBank, Oschadbank, Raiffeisen Bank, Ukrgasbank and others.

The main conditions of this business lending program are as follows:

low interest rate per annum – 5%, 7% or 9%, respectively (depending on the number of jobs);
flexibility of use (it is allowed to spend the loan to replenish working capital, implement investment projects, as well as refinance existing loan obligations).

Other financing (leasing, factoring)

If desired, an entrepreneur can also use other ways to finance his business, for example, state aid from JSC “Decarbonization Fund of Ukraine”.

This initiative allows you to receive resources for energy efficiency projects (replacement of equipment, installation of alternative energy sources, etc.) in the following forms, except for lending:

leasing (a type of long-term lease with the right to further purchase equipment or transport);
factoring (redemption of receivables to provide access to working capital).

What conditions must a business meet in order to receive funding?

As a general rule, in order to receive funding, a business must meet a number of conditions regarding:

duration of registration and work experience (preferred by companies that have been on the market for at least 12 months);
business reputation (the company must not be involved in litigation in the field of criminal and administrative law, pay taxes properly);
proper financial condition (first of all, profitability, liquidity, solvency and creditworthiness of the business are analyzed, including the possibility of pledging the relevant property if necessary);
compliance with payment discipline (absence of overdue payments on loans or other financial obligations);
lack of ties with the aggressor state (in particular, its residents).

What does a business need to attract targeted funding?

Obtaining financing for business is a long and quite difficult job. During the assessment of an entrepreneur as part of the procedure for lending, receiving a grant or other state support, a whole package of documents is checked.

Therefore, businesses need to take care of preparing the main ones, in particular:

the current version of the charter;
documents on the ownership or lease of the company’s property;
financial statements for the last year (balance sheet, statement of financial results, cash flow);
tax returns for the previous reporting period and certificates of absence of debt;
business plan (description and estimate of the investment project);
agreements with partners, etc.

It will also be useful: Small business lending programs

How can Prikhodko & Partners’ specialists help to obtain business financing?

Attracting funding requires not only an understanding of financial instruments, but also impeccable support from the beginning of the procedure to its logical conclusion.

The specialists of Prikhodko & Partners provide a full range of services aimed at choosing the appropriate program and going through the stages of receiving funds under it.