Moscow entrepreneurs got 16,5 billion rubles' worth of credits under the guarantee support program for the seven months of 2021. This is one third more than for the same period last year, the capital's Department of Entrepreneurship and Innovative Development reported.

"For seven months of 2021 the Fund (assistance to crediting of small business of Moscow - ed.) has given out guarantees in the volume of 7,9 billion rubles under which the Moscow business has received 16,5 billion rubles of borrowed financing. It is by one third more, than for the similar period of 2020. Of these, about 6 billion rubles was provided to entrepreneurs at a preferential rate at the expense of Moscow subsidies, and another 3.8 billion rubles at a preferential rate at the expense of federal subsidies," said Alexei Fursin, head of the department.

As it was explained in the Mayor's Office, the entrepreneurs most often take the credit in case of working capital shortage, for this purpose the Fund has provided two thirds of the guarantees. 65% of the guarantee support recipients are trading companies, 16% - manufacturing and innovation companies, 8% - service providers, 5% are involved in construction, 3% - in transportation and communication, 2% - in medicine, the remaining 1% is for other areas. 89% of the disbursed funds with guarantee support were received by micro and small companies.

The combination of state support programmes solves two key problems of business lending at once. Surety covers up to 70% of the loan, which significantly reduces the risk of lending to this category of borrowers and has a positive effect on the bank's decision to grant, the department said. In addition, the program of subsidies to offset the interest rate allows the borrower to offer a rate that is significantly lower than the market average. As a result the entrepreneurs receive the funds under the most comfortable conditions.

The average size of sureties, issued by the Fund to promote lending to small businesses is 20 million rubles, the maximum amount of coverage - 70%, but not more than 100 million rubles, the rate - from 0.5% per annum. Entrepreneurs can apply for guarantees through 70 partner lenders, business service centres and directly to the Fund.

Over 18 thousand Moscow companies have received concessional loans totaling more than 132.9 billion rubles since May 2020 for the duration of the program. Under the terms of the program, the Moscow government subsidizes up to 8% of the annual interest rate. In July 2021 the programme has been modified and prolonged with a focus on the priority sectors of the city. Entrepreneurs can find out more details and apply for a preferential loan at cashback.moscow.business.

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Author: Karina Kamalova