Alexey opened a bakery where he makes pies according to old grandmother’s recipes. Unexpectedly for him, the products became mega-popular. Not so long ago, he opened a second bakery “Hole from a bagel” in another area of the city, but it is already clear that this is not enough. Demand clearly exceeds supply. Alexey is thinking of creating a whole chain of cafes and bakeries, but this requires money. He has heard about concessional small business loans and is trying to figure out how to get them.
The state is ready to support small and medium-sized enterprises (SMEs) in various ways. Businessmen can get a loan guarantee (Alexey has already used this method ), lease equipment on special terms, or get a soft loan.
But, what if you are a student and needs a load for your study related expenses? Then, you can opt for student loans. To learn more about it, go to Private student loan settlement.
Now Alexey needs not only to buy equipment, but also to rent new premises, hire bakers and sellers, and increase purchases of raw materials. He reasoned that this could be done with money received on credit at a preferential rate.
How much is the preferential rate?
There are several concessional lending programs for small and medium-sized businesses.
Under the concessional lending program for small and medium-sized businesses, banks issue loans at a rate that cannot exceed the key rate by more than 2.75 percentage points (pp). Its current value can be found on the regulator’s website .
Companies, individual entrepreneurs and self-employed are eligible to participate in this program. If they have already taken out an investment loan at the usual market interest rate, then they can refinance it at a preferential rate.
The state program also provides for a special type of concessional loan – for the development of entrepreneurial activity. It can only be obtained by self-employed and micro-enterprises (the number of employees does not exceed 15 people, and the annual revenue is 120 million rubles). The interest on such a loan is higher – up to 9.95% per annum. The amount cannot exceed 10 million rubles, and the term is 5 years. But the requirements for borrowers are minimal – they are spelled out in a government decree .
If you need a small amount, up to 5 million rubles, it makes sense to contact a state microfinance organization (MFO) in your region (the state’s share in the capital of such MFOs is at least 50%). These MFOs participate in a subsidy program from the federal and regional budgets and provide loans to entrepreneurs at low rates. Interest can range from 0.5 to 2.5 of the key rate of the Bank of Russia. Its current value can be found on the regulator’s website . As of January 2020, it was 6.25% . Detailed terms of the program can be found in the order of the Ministry of Economic Development .
The self-employed can also count on a concessional loan under this program – up to 1 million rubles.
Entrepreneurs can also count on the SME Corporation’s SME lending incentive program . On it, the rates are slightly higher: from 9.1 to 10.1%. The minimum loan amount is 3 million rubles.
