Obtaining a grant for production

Recently, we have seen a rapid increase in the number of people who want to start their own production.

The eRobota program entitled “Grant for the production of processing industry” provides an opportunity to receive financing for such activities in the amount of up to 8 million hryvnias.

Despite the fact that the description of this program clearly stipulates which activity can receive a grant, most of our clients have a question whether this or that activity should be classified as a processing industry.

This article is intended not only to inform people about the possibility of receiving a corresponding grant, but also to inform about the activities that can be considered as processing industry on the example of individual requests of our clients.

But first, let’s start by understanding the concept of “processing industry” or, more simply, “processing”. It should be understood as an economic activity that involves the production of a new material object with different functional capabilities from an already existing material object, the composition of several such objects into a single whole.

Such activity also involves the use of appropriate production equipment: machines, machinery, related equipment, machines, etc. In other words, a processing enterprise is the same production that, according to the terms of the grant program from “eRobota”, covers the types of activities provided for by KVED from 10 to 33.

Here are some examples of requests to the specialists of Prikhodko and Partners from clients who wanted to receive funds for their own business:

1. The most popular: sewing production (KVED 14. Clothing production); printing shop (KVED 18. 12.Printing of other products), fodder production (KVED 10.9. Production of ready feed for animals), furniture shop (KVED 30. Production of furniture);
2. Less frequent: bakery (KVED 10.7. Production of bread, bakery and flour products), waste processing (KVED 32.9. Production of products, n. in. and. in.), production of jewelry and ornaments (KVED 32.1. Production of jewelry, bijouterie and similar products);
3. Rare: production of drones and UAVs (KVED 30.30. Production of air and space aircraft, related equipment).

Now let’s move on to the conditions of the grant program itself for the production of the processing industry.

First, after receiving a positive decision on the grant, the applicant must register a sole proprietorship or a legal entity within 20 days, open a special account at Oschadbank for crediting funds and deposit the amount of his own contribution.

Secondly, to officially employ from 5 to 25 people on a full-time basis, depending on the amount of funding received, within six months from the moment of receipt of funds to a special account (in some cases, it is possible to employ 30% of people during this period, and the rest in the following six months).

Finally, the person must conduct activities for the next three years and pay taxes to the state budget for himself and his employees.

Let’s also examine the requirements for the candidate:

1. Positive business reputation the applicant, if a sole proprietorship, or if the legal entity is a positive business reputation of both the founder and director, ultimate beneficial owners, related legal entities: absence of credit arrears of more than 90 days, tax debts, open legal proceedings in which the person the candidate has been held criminally or administratively liable;
2. Obligation to invest own funds in the implementation of a business project in a ratio of 50/50 to the cost of the project for most regions of Ukraine, or in a ratio of 80/20 for reoccupied territories, regions where hostilities were carried out, there is an increased level of danger (for example, Kharkiv, Mykolaiv, Zaporizhzhya, Dnipropetrovsk regions), for production air and space aircraft, related equipment. Funds can be represented by the applicant’s own money, credit funds or the contribution of an investor or donor;
3. No more than 4 ultimate beneficial owners or related legal entities (if the person operates as a founder of a legal entity).

Finally, the candidate must confirm when submitting the grant application that he does not operate in the occupied territory, within the Russian Federation or the Republic of Belarus, is not subject to sanctions, is not under international arrest, is not in the process of bankruptcy and other formal aspects.

Conclusions. To start own production, the client can apply for “Grant for the production of processing industry”, if its activity falls under KVED from 10 to 33 (clothing, printing, bakery, jewelry production, waste processing, production of fuel pellets, etc.).

The specialists of Prikhodko and Partners, in their turn, are ready to provide their professional support services for this grant program by submitting a correctly executed grant application, developing a business plan, preparing the candidate for an interview with representatives of the regional Employment Center, and leading him to a positive result.