Farmers need funds to complete the harvest and carry out autumn sowing campaign. Recently, the UAC appealed to the authorities to extend the terms of preferential lending to agricultural producers, which was terminated on May 31, 2022. Today, August 19, Resolution No. 916 of the Cabinet of Ministers of Ukraine dated July 29, 2022 has been published, according to which agricultural enterprises can receive loans, according to which the state compensates the interest until October 31, 2022.

The UAC experts analyzed the new lending conditions.

Regarding the Procedure for providing financial state support to business entities:

• a loan for the purchase of fixed assets and covering any expenses related to the implementation of agricultural activities by an agricultural producer, for which the state compensates for interest, can be drawn until October 31, 2022 (it was until May 31);
• the loan can be obtained for a period of no more than 12 months (it was up to 6);
• the maximum loan amount has been increased to UAH90 million;
• the bank can increase the interest rate on the loan, but not more than 20 percent. At the same time, the state compensates only the basic interest rate, which is the UIRD Index (three months) plus five percentage points (for small business entities plus six). Everything that exceeds this interest rate is paid by the borrower. The UIRD index in hryvnia for the last week was about 10 percent;
• the loan cannot be secured by a pledge not only of property rights under the bank deposit agreement, but also by domestic state loan bonds. The wartime loan exception is excluded;
• in the criteria for an authorized bank, it is added that if the NBU has not applied sanctions to the bank, such a bank is considered to meet the criteria.

Regarding the provision of financial state support to business entities under financial leasing contracts:

• a loan for the purchase of fixed assets and covering any expenses related to the implementation of agricultural activities by an agricultural producer, for which the state compensates percentage, can be drawn until October 31, 2022 (it was until May 31);
• the bank can increase the interest rate on the loan, but not more than 20 percent. At the same time, the state compensates only the basic interest rate, which is the UIRD Index (three months) plus five percentage points (for small business entities plus six). Everything that exceeds this interest rate is paid by the borrower. The UIRD index in hryvnia for the last week was about 10 percent;

Regarding the Procedure for providing state guarantees on a portfolio basis:

• the period of the state guarantee on a portfolio basis has been extended to two years to ensure partial fulfillment of debt obligations under loans granted to agricultural producers;
• the bank can increase the nominal interest rate on the loan, but not more than 20 percent.