Lending to entrepreneurs in Russia: program details
The economic crisis caused by the coronavirus epidemic has hit business hard. Small firms were mostly affected, forcing them to close for quarantine and send their employees on unpaid leave. In order to support small and medium-sized businesses, the Central Bank of Russia introduced minimum interest rate loans to entrepreneurs. In total, the government has allocated 150 billion rubles, which can be arranged for the owners of firms to pay off the arrears of wages of employees.
The Central Bank recommends banks to issue such loans for 4 years at 4% per annum. The maximum loan amount is calculated according to the average salary for a particular company, as well as the approved program. The rates should not exceed the values recommended by the Central Bank.
A pilot project is currently under way, in which Sberbank and VTB are taking part. Financial institutions state that they are ready to cooperate with small and medium-sized businesses and in some cases provide loans at 0% per annum. Such loans are issued for a short period of time and do not require entrepreneurs to provide collateral in the form of property.
Zero loans are for six months, during which banks are not allowed to raise the rate. Loans that are granted for a year are issued at 4% per annum. In addition, the Central Bank plans to expand refinancing to 500 billion rubles.
Such an initiative of the Central Bank is another step for business support. Other measures have been introduced, which will reduce the damage to the economy. Among them: deferral of rent payment for small and medium enterprises by 3 months, zeroing of import duties. Special conditions have been created for the supply of socially important products, and in order to support the aviation and tourism industries, they are provided with special conditions when paying taxes. In addition, the owners of tourist businesses can take a loan from a bank on favorable terms.
In March, the Russian government presented a plan to support the economy, and one of its items was financial assistance to systemically important enterprises. Such companies will be able to apply for loans, subsidies and deferred tax payments. The list includes large retail chains such as Vkusvill, as well as fast food restaurants KFC, Mcdonalds, AmRest and others.
Special privileges for consumers are provided. Sberbank has introduced the service of credit holidays, it can be used by people who repay mortgages and consumer loans. The programme is available for customers who have taken out mortgages of up to RUB 1.5 million or consumer loans of up to RUB 250,000.
Applications for deferred payment are submitted to the bank, where they are considered and consented.