Cheap money for hot spots: the state has extended lending at 1% to 5 years
28 May 2025 15:38
Ukrainian businesses that continue to operate in the most difficult conditions – near the front line or in regions that are regularly shelled – will receive additional financial relief. This is reported by "Komersant Ukrainian" with reference to information on the website of the Ministry of Economy of Ukraine.
The Cabinet of Ministers of Ukraine has decided to extend the term of preferential lending at 1% to five years for companies operating in areas of high military risk.
What it means in practice
Businesses that could previously enjoy the preferential rate for only two years will now have a longer planning horizon. The lending terms of the Affordable Loans 5-7-9% program allow entrepreneurs to raise funds with government support – and in the war zone, the rate will be only 1% for five years. This is one of the lowest rates of financial support for SMEs in crisis regions in the world.
Why this is important
Businesses in war zones often operate on the edge of survival:
- destroyed infrastructure,
- lack of predictable logistics,
- shortage of labor,
- constant risk of physical losses.
In such conditions, access to cheap money is not a matter of development, but of preserving the very ability to function. Sales, production, and even the simplest operations require investments, otherwise the business either shuts down or relocates.
We have extended the period during which companies in areas of high military risk will be able to repay the loan at 1%. From now on, it will be five years instead of two. This means more stability for business and more opportunities to invest the saved funds in development,” emphasized Minister of Economy of Ukraine Yulia Svyrydenko.
Who benefits from this
- Enterprises that were unable to leave but want to restart or maintain their business.
- Production facilities that have adapted to the war conditions and continue to supply the local economy.
- Investors and relocated businesses that consider the frontline regions as a platform for launching new projects – but have been holding back due to the short payback period.
According to the Ministry of Economy, more than 20% of all loans under the 5-7-9% program are now for businesses in war-risk areas. This is not just a number, but evidence of Ukraine’s economic resilience: even under fire, entrepreneurs create jobs, pay taxes, and keep the economy going.
What are the prospects for the near future?
Concessional lending is only part of the economic framework for regions with a high level of threat. The government is already working on
- expanding enterprise relocation programs,
- tax incentives for manufacturers,
- simplified access to grants for innovation and critical infrastructure,
- support for exports from dangerous regions through risk insurance.
Supporting entrepreneurship means supporting the resistance economy.
The more businesses that can be retained, the sooner real reconstruction will begin – not declarative, but with specific employers, partners, supply chains, and a future for local communities.
Read also: The government has changed the terms of the program “Affordable Loans 5-7-9%”
Government program “Affordable Loans 5-7-9”: what you need to know
This is a state financial initiative of Ukraine launched in 2020 to support small and medium-sized businesses. Its purpose is to provide entrepreneurs with access to preferential lending at a reduced rate, which is partially compensated by the state. Most importantly, this program continues to operate during the war, adapting to the new conditions.
Key terms of the program:
- Rates: 5%, 7%, or 9% per annum, depending on the size of the business, the purpose of the loan, and the number of jobs.
- Loan amount: usually up to UAH 60 million, but may be higher in some cases.
- Purpose: investments, working capital, refinancing of existing loans, and during the war, preservation or restoration of business in the war zone.
The government compensates part of the interest on the loan, making it cheaper for the borrower.
Who is the program for
- Small and medium-sized businesses (registered individual entrepreneurs or legal entities).
- Companies operating in priority areas such as manufacturing, agriculture, exports, and critical infrastructure.
- Companies operating in high-risk areas of war.
Why it is important now
During the war, conditions became more flexible:
- Businesses in combat zones can get 1% for 5 years.
- Loans are available even for relocated or restored businesses.
- The focus is on survival, stability, and economic recovery.
In fact, this is one of the few tools that give businesses a chance not only to survive but also to develop in an unstable environment.
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