State small business lending program 5-7-9

The program “Affordable Loans at 5-7-9%” is aimed at financial support for small and medium-sized businesses in Ukraine.  

Lending under this program has low interest rates per annum, which significantly reduces the financial burden on the candidate, respectively.  

In this article, we will explore the main conditions of this loan program and determine how a lawyer will help you get a loan.   

What is 5-7-9 Small Business Lending?   

5-7-9 loans are a state initiative created by the government to support businesses in especially difficult periods, including under martial law.  

According to this program, financing is provided to entrepreneurs at preferential rates with the possibility of reducing them in cases of hiring new people officially (0.5% for each newly created workplace).  

Thus, it is possible to reduce the rate of 9% per annum assigned to you at the evaluation stage to 5% (but not less) if you hire 8 employees during the first quarter of using funds.   

In addition, according to the terms of this state small business lending program:  

• the maximum loan amount is UAH 60 million;  
• the loan repayment period can be from six months to 5 full years;  
• the funds can be used both to replenish working capital and for an investment project.  

Who can get a loan under 5-7-9 terms?   

The main criteria for borrowers are the following:  

• firstly, it must be officially registered as a business entity in accordance with the current national legislation;  
• secondly, the ultimate beneficial owners of the business must be residents of Ukraine;  
• thirdly, the company or individual entrepreneur must belong to a small or medium-sized business (have no more than 249 people in the staff and no more than 50 million euros in annual income);  
• fourthly, the borrower must have a good business reputation, pay tax debts on time, and not be accused of committing a criminal or administrative offense;  
• finally, the business must demonstrate proper compliance with payment discipline and prove its creditworthiness (including having property as collateral under a loan agreement).   

It is important to know! There are also certain restrictions on companies wishing to obtain a loan.  

Therefore, those entities that are located in the temporarily occupied territories of Ukraine or in zones where active hostilities are taking place cannot participate in the state program of lending to small businesses 5-7-9.  

For more detailed information, please contact our lawyer for advice.   

What are the main stages of obtaining state support (lending) for small businesses 5-7-9?   

The process of obtaining a loan consists of several key steps, including:  

1. choosing a bank in which the 5-7-9 loan will be issued. Today, about 46 banks launch similar programs with slightly different terms of cooperation (regarding the payment of commissions), including PrivatBank, Oschadbank, Raiffeisen, Ukrsibbank and others;  
2. opening a current account of the enterprise in the relevant bank (if necessary);  
3. contacting the bank’s employees and filling out an application for a loan on preferential terms;  
4. preparation of the necessary documents on the financial condition of the business, the absence of debts, guarantees of the absence of any ties with the aggressor state, etc. Often, they may also be asked to provide a certificate of the amounts of state support received over the past three years or more;  
5. consideration of the application and making a final decision on the candidate. After that, a loan agreement is signed between the bank and the company or individual entrepreneur.   

What can you (not) spend a 5-7-9 loan on?   

A loan under the state program 5-7-9 is provided exclusively for exhaustive needs.  

The ability to use funds is limited to the following costs:  

• purchase or modernization of equipment;  
• purchase of commercial real estate;  
• construction, reconstruction or overhaul of premises for the main activity;  
• purchase of vehicles for production needs;  
• purchase of intellectual property rights;  
• financing of current costs (payment for contractors’ services, settlements with suppliers, etc.);  
• repayment of other loans (due to a decrease in the interest rate). 

Note! In accordance with the terms of this lending program, it is not allowed to spend funds on the purchase of housing, cars for personal use, payment of tax debts.   

What services can a lawyer of Prikhodko & Partners provide for obtaining a 5-7-9 loan?  

Our law firm “Prikhodko & Partners”, providing services to Ukrainian businesses for several years, is actively engaged in the search and support of various lending programs.  

Among the main services of our specialists, it is worth highlighting:  

1. legal consulting (including work with documentation for banks);  
2. work with agreements (legal analysis of crediting, loan, leasing and factoring agreements);  
3. legal support for resolving civil and commercial disputes (in court and pre-trial).  

Do you have any questions? Contact a lawyer of Prikhodko & Partners and find out the cost of his support in obtaining a 5-7-9 loan for small businesses.