How to get a loan for business development? How to get a loan for a small business from the state: types of loans and documents to receive What kind of help an entrepreneur can count on.
03Sep
Hello! In this article we will talk about how to get a loan for a small business from the state.
Today you will learn:
- What types of government loans exist for businesses?
- Who can receive government support?
- Which authorities should I contact for help?
- What documents need to be collected?
The government offers an alternative - state support for small businesses. But before you turn to the authorities for help, you should understand what type of government loan will be optimal for you - that’s where we’ll start.
Types of loans from the state for business
In 2017, the government actively supports start-up entrepreneurs and provides assistance in the form of such forms of material support as:
- Small business microfinance;
- Guarantee from the state;
- (free loan);
- Compensation payments;
- Tax relief.
Now we will consider each type of state support for small and medium-sized businesses separately.
Small business microfinance
Each region of the Russian Federation has a microcredit fund for small and medium-sized businesses. It is he who facilitates the issuance of borrowed funds to entrepreneurs on a preferential basis.
Lending conditions are different in each region. A significant advantage of this type of lending is its accessibility: money is provided regardless of the area of employment.
There are only some restrictions that are determined by each region independently. For example, for Moscow this is a limit on the amount of a loan to a young entrepreneur.
Average conditions for obtaining a preferential loan:
- or physical () in the territory of the subject of the Russian Federation in which the loan will be received;
- From 50 thousand to 1.5 million rubles (restrictions may be imposed on the amount depending on the scope of the organization’s activities);
- The interest rate of a preferential loan ranges from 8 to 12% and will depend on the prospects of your business, market needs, the solvency of the borrower, the amount of borrowed funds and the loan term, the type of collateral;
- Money is provided against security: property pledge, surety, pledge of a product in circulation, etc.;
- The loan is issued in non-cash form;
- If the conditions for providing money are not met, penalties are provided in the form of an increased percentage;
- There is a limit on the number of loans;
- The duration of consideration of documents for the provision of funds ranges from 5 to 10 days, depending on the region.
State guarantee
In this case, a commercial bank will give you the money, and the state fund, represented by the Federal Notary Chamber, will act as a guarantor. However, it should be borne in mind that not all commercial banks participate in the state program. Their complete list in your region can be obtained on the official website of the Russian government.
Unlike the first option, receiving funds under government guarantee does not differ in terms from a regular loan. Review of your application will not be quick. Also be prepared for the fact that the fund will not guarantee the entire amount, but only a portion.
Social enterprises providing services to citizens, production and industry, and innovation are most likely to receive a guarantee from the fund. When considering an application for a guarantee, the fund pays special attention to the number of jobs created by the organization.
Subsidies
Subsidies are the most desired type of government support by entrepreneurs. The thing is that it is provided to businessmen free of charge.
However, not all entrepreneurs can receive a subsidy.
Businessmen must meet fairly stringent conditions to obtain:
- It is necessary to register with the Employment Center as an unemployed person;
- Answer the psychological test questions at the same Employment Center;
- Complete training in entrepreneurship;
At the same time, all expenditures of government money must be consistent and supported by documents. After an entrepreneur receives a positive response from the Center, he must register his enterprise. Only after this the money will be credited to your account.
It often happens that an entrepreneur is denied a subsidy. The grant may be allocated for the purchase of either equipment or goods for sale, or intangible resources. This should be stated in your business plan.
Grant
It is also provided to businessmen free of charge. The disadvantage of grants is that not everyone can receive one.
The following are eligible to receive a grant:
- Beginning entrepreneurs (have been operating for no more than 12 months);
- Entrepreneurs who do not have debts on taxes or loans;
- Businesses that create a lot of jobs.
Also, the area in which the organization operates is important for receiving a grant. Each region defines these areas independently.
Compensation payments and tax breaks
In this case, the state simply compensates the entrepreneur for part of the money that he spent on business development.
The following companies can count on such a relaxation: companies producing innovative products, enterprises producing import-substituting goods, as well as service providers.
As for tax breaks, in 2017 a novice entrepreneur has the opportunity to take the so-called. They consist in exempting a businessman from paying taxes for two tax periods.
You can take advantage of vacations if:
- Are you an aspiring entrepreneur?
- Organization on one of the following taxation systems: or;
- You are employed in manufacturing, social welfare or science.
Requirements for borrowers
Let's take a closer look at what requirements are imposed on applicants for state support to receive a particular benefit. The information is given in the table.
| Conditions of receipt | Important Features | |
| Microfinance | — registered in the region where funds are received; - the loan must be secured by property |
— goal: development of small and medium-sized businesses; - loan terms - |
| State guarantee | — the bank must participate in the state program; — you must be an active organization for at least 6 months; — registration in the region where the loan is received is required; — you do not have problems with creditors and tax authorities; — it is necessary to repay a certain percentage of the loan with your own funds (set in each region) |
— The priority activities for financing are: production, innovation, construction, service activities, transportation, tourism (in the Russian Federation), education, medicine, housing and communal services. — Does not apply to the extraction and sale of minerals, gambling, banking and insurance activities, securities funds, pawnshops |
| Subsidy | — the importance of business for a constituent entity of the Russian Federation. Each subject has its own significant areas (you can find out the priority areas of activity for your region on government resources); — presence of a business plan that must meet certain criteria (also established in each region); — the entrepreneur must invest a certain amount of his own funds (depending on the program) |
Funds are issued for the purchase of: — raw materials and supplies; — production equipment; — intangible resources. The period of use of funds is limited. Typically 1-2 years |
| Grant | — business activity has been conducted for less than a year; — the businessman does not and has not had problems with loans and borrowings (“clean” credit history); — the enterprise creates a certain number of jobs; — you did not receive other government benefits; - availability of own funds |
Funds are allocated for the development of medium and small businesses |
| Compensation payments |
Borrowers can be: — manufacturers and developers of innovative products; — sellers of import-substituting goods; — organizations engaged in the provision of services |
Spending goals: development of medium and small businesses |
| Tax benefits | — engaged in entrepreneurial activity for no more than a year; — you are a member of the taxation system: PSN or simplified tax system; — assistance is provided to companies engaged in science, production, and providing services to the population. |
To summarize, government assistance is available for:
- Beginning businessmen ();
- Organizations involved in the production of products, development of innovative products;
- Enterprises providing services to the public;
- Entrepreneurs have no problems with loans.
Where to contact
For each material benefit, a certain government body is responsible, to which the entrepreneur must apply.
Microfinance is provided by the Entrepreneurship Support Fund in your region. To receive a loan on preferential terms, you need to collect a package of documents (it differs for individual entrepreneurs and legal entities).
You can find out more about this issue on the official website of the fund in your region; we will name only the main generally accepted documents:
- Application and questionnaire of the applicant, as well as the guarantor;
- Entrepreneur data;
- Constituent documents;
- Extract from the register of small and medium-sized businesses;
- Certificate of entry into / and extract from there;
- A copy of the applicant's passport;
- Copy of SNILS;
- Activity licenses;
- Accounting and tax reports.
After you have collected all the documents, you should submit an application for a loan to the Support Fund. You can also download such a statement on the official website of the Foundation in your region.
For a government guarantee, you must apply with all the necessary documents to a bank that participates in a partnership program with the Entrepreneurship Promotion Fund.
The bank itself will evaluate the possibility of government support and submit the application to the fund, which will consider it within three days. An application for a guarantee should be attached to the standard package of documents required to obtain a loan.
A subsidy or grant can be obtained from the labor exchange. To do this, you must meet a number of conditions that we have already discussed above. The package of documents for receiving a subsidy includes an application and a business plan.
You can receive compensation payments at the employment center. To do this, provide a business plan and a corresponding application.
To receive tax benefits, you should contact the tax office, where you will receive information about the documents that will need to be collected.
Non-state support for small businesses
If you do not meet any of the criteria for receiving government assistance, you can apply for non-government assistance for small businesses.
Such assistance is provided by non-state funds affiliated with banking organizations, and is expressed in the form of a grant. At the same time, a non-state grant can be issued both with a return and on a gratuitous basis.
The grant is received on a competitive basis. At the same time, members of the commission will evaluate the economic benefits of the project.
To the standard package of documents for receiving a grant, you will need to attach a document that will describe the product and its cost.
When drawing up a high-quality business plan for starting or expanding activities, replenishing and modernizing fixed assets, many entrepreneurs are looking for profitable ways to attract additional funds. Loans for small businesses outperform offers from private investors with speed of processing, minimum rates and a large selection of programs:
- Express loans - up to 200 - 300 thousand rubles. to increase working capital. Individual entrepreneurs and legal entities engaged in trading activities can apply for a loan.
- Microcredit - up to 1.5 million rubles. to replenish fixed and working capital. Preference is given to companies engaged in trading and manufacturing activities and providing services.
- Small loans - up to 5 million rubles. Representatives of small and medium-sized businesses can apply for issuance.
- Loans under the “Agro+” program - up to 1 million rubles. entrepreneurs specializing in the agricultural sector.
- Overdraft (expense in excess of the account balance) - up to 1.5 million rubles. to increase turnover. The program is designed for lending to legal entities.
- Credit lines - the amount is calculated individually, depending on the account turnover. Funds are provided only to legal entities.
- Credit cards - up to 100 thousand rubles. for small purchases and business travel expenses. Loans are issued to individual entrepreneurs and legal entities in various fields.
Depending on the choice of program, the bank evaluates the documentation from 1 day to 2 months. Additional benefits are provided to customers who have a current or current account with the bank.
Who do they lend to?
As part of the programs of international financial organizations, the issuance of loans is not available to companies offering alcohol and tobacco products, gambling, real estate or food products to the public. Banks make a negative decision when applying for a loan to create an authorized capital and pay off current obligations.
They are wary of manufacturing companies. Owners of small production shops (shoemakers and tailors) can apply for a loan if they have extensive business experience, a wide range of suppliers of raw materials and a customer base.
Loyal conditions are provided:
- Trade enterprises (to increase working capital) - shops, catering establishments or beauty salons.
- For road carriers applying for a loan for the purchase of a vehicle.
- To farmers (loan funds are issued within the framework of the Agro+ program).
Banks are reluctant to provide loans to start a business. There are more chances to get a loan to change activities or develop a new business area.
Lending purposes
Loans are provided to entrepreneurs for various purposes:
- To cover additional costs.
- For maintenance and repair of buildings and structures.
- Equipment modernization.
- To open a business.
Who falls under the category of borrowers?
Entrepreneurs applying for a loan from a bank are subject to a number of requirements:
- Legal status – individual entrepreneur or legal entity, joint-stock company or private person with equity participation.
- Place of registration – preferably the company is registered and carries out activities on the territory of the bank.
- The period of doing business is from 6 to 12 months. from the moment of registration.
- The maximum number of employees is up to 100 people.
- Confirmation of the absence of imposed arrests and bans.
Business owners, as individuals, are also subject to a number of criteria:
- Russian citizenship.
- No arrears on previous loans.
- Registration in the territory of the financial institution.
- The client must meet the status of an individual entrepreneur, or have ownership rights in the business.
- Age limit - from 21 to 60 years.
- Availability of a landline telephone.
Based on the choice of program or loan parameters, banks may impose additional conditions.
Overpayment amount
SME lending programs feature minimal overpayments. Thus, the average overpayment ranges from 16 to 24% per annum. A number of companies set limits from 14.9 to 18.5%. There are also programs on the market with rates of 28% or more, which is typical for small banks.
Package of documents
Participants in the program for lending to individual entrepreneurs and SMEs without collateral or guarantors are asked to collect a standard package of documentation:
- Application for consideration. Served in the office or on the company website.
- Original or photocopy of passport.
- State registration certificate (copy).
- For legal entities - a photocopy of the Charter, extracts from shareholder registers, an order on the appointment of a chief accountant, minutes of shareholder meetings, etc.
- For a registered business - a report on the movement of funds in the account.
The Bank reserves the right to require additional securities:
- Constituent documentation for legal entities.
- Confirmation of the settlement of the client’s relations with the authorities conscripting citizens for military service.
- Confirmation of expenses associated with the acquisition of rights to a share in property.
Loan size
The average loan size is 4.5 million rubles. Some companies are ready to issue a loan in the amount of 500 thousand to 1 million rubles, others up to 7 million rubles.
For what period should the loan be issued?
The average lending period for SMEs is 36 months. Less often, banks issue contracts for 5-7 years, which is typical for large systemic organizations.
How to pay off debt?
In the Russian financial market, programs designed to repay loans using the annuity method are more common. Clients make payments in equal installments according to the loan repayment schedule. A differentiated scheme is extremely rare in practice.
Bank selection
If you have accreditation with a bank, you should contact it, this will allow you to clarify the conditions and compare them with offers from other companies:
- VTB24 - “Negotiable” from RUB 850,000, from 11.8%, up to 3 years. Loan fee - from 0.3%.
- Zenit - up to 30 million rubles, 13–14.5%, up to 2 years. No down payment required. It is possible to defer the repayment of the principal debt for up to 12 months.
- Kraiinvestbank - 3 programs are provided: for business development from 500,000 to 70,000,000 rubles. for up to 7 years at 13%, turnover at 13% or overdraft from 16%.
- Levoberezhny - from 150,000 to 3,000,000 at 15% for up to 6 years (universal program “Business without borders”).
- Promtransbank - from 150,000, from 15 to 35% per annum, up to 5 years.
- Rosselkhozbank - from 1 million rubles, 13%, from 6 months.
- Center-Invest - from 300,000 rub. at 12% per annum, up to 36 months.
- Energomashbank - overdraft from RUB 300,000, from 17% per annum, up to 12 months.
Positive and negative characteristics
The advantages include:
High flexibility in determining rates and personal terms of service.
Receipt of the agreed amount without collateral or guarantors.
Loyal conditions for regular customers.
Cons include:
- Informing the bank about doing business.
- Lengthy documentation collection.
- Low percentage of approval of applications to open a business.
- Limitations in choosing a business direction.
Small Business Lending Fund
When applying for a loan from a bank, entrepreneurs cannot always provide collateral to cover possible risks. An advisable solution would be to use the possibility of obtaining a guarantee from the FSKMB, which is equivalent to registering a pledge. Depending on the type of activity of the borrower, the Fund acts as a guarantor for a loan from 60 to 90% of the requested loan (up to 60% for wholesale and retail enterprises, travel agencies, up to 70% for transport and agricultural companies, etc.).
Loan processing time ranges from 3 to 60 months.
Fund partners:
- PJSC SB RF.
- PJSC Bank "Levoberezhny".
- JSCIB "Education".
- JSC "RSHB".
- PJSC "Bank ZENIT"
- PJSC "VTB24".
- PJSC Promsvyazbank.
- JSC Banca Intesa.
- JSC "SMP-Bank".
- PJSC Bank "FC Otkritie".
In search of the most favorable conditions for revolving lending to SMEs, many entrepreneurs will be interested in the conditions of Sberbank; in 2017, the company offers:
- Loan amount: from 10 million rubles. up to 1 billion rubles
- Goals: purchase of fixed assets, modernization and reconstruction of production lines, implementation of new projects and replenishment of working capital (in the areas of agriculture, products, electricity, gas and water, construction, transport and communications).
- Rates: from 9.6%.
- Terms of preferential funding: up to 3 years.
Applying for a loan is carried out in a number of stages:
- Familiarization with the terms of the loan, consultation with a background employee.
- Preparation of a documentation package.
- Submitting an application and collected papers.
- Familiarization of the Foundation's employees with the place of business.
- Conclusion of an agreement.
Transferred to the entrepreneur's account.
In conditions of the economic crisis, small businesses are in dire need of additional capital investment. It's becoming main reason for entrepreneurs in need of obtaining loans.
Conditions for 2020
“Borrowing” money to develop your business or start-up is not so difficult today.
It will be enough for this meet certain banking requirements.
If you wish, you can seek help from government agencies or private structures.
Moreover, it is necessary to understand that the main obstacle today remains high interest rates, which significantly exceed the rate of the Central Bank of the Russian Federation, which, according to existing economic standards, is rightfully considered not a cheap pleasure.
Basic requirements for a potential borrower
Despite the fact that each lender puts forward its own personal conditions for lending to small businesses, often the so-called portrait of the borrower must meet such general requirements, How:
- mandatory presence of Russian citizenship;
- mandatory permanent registration;
- age category from 21 to 65 years;
- impeccable credit rating;
- presence of an official source of profit.
If such criteria are not met You shouldn’t count on financial help.
Receipt
First of all, from the potential borrower must have an impeccable business plan. Based on this document, lenders assess the chances of returning the borrowed funds. A big advantage is the fact that there is any movable or immovable property in the right of ownership for its provision as collateral.
If there is no suitable collateral, it is imperative to provide guarantors, otherwise you should not count on financial support.
According to statistics, the country's budget is formed from small businesses 30-35%
. For this reason, the Russian government always talks about the need for financial support for individual entrepreneurs.
For these purposes, many government programs are developed annually, which allow significant savings on overpayments of interest.
Those entrepreneurs who were unable to take part in government programs they have a right choose a different support program from various banking institutions.
Where to get
Depending on what program you are trying to apply for a loan under, the lender you need to contact will also depend.
Preferential variety
For today it is provided quite a few preferential lending programs for small businesses. For individual entrepreneurs, there are subsidy services that are aimed at stimulating potential SMEs. Thanks to the use of one of the programs, can be significantly reduced credit burden, while reducing the amount of monthly mandatory payments.
Often, such programs do not operate in all regions of the Russian Federation, so you can find out more about them at your place of residence in the authorized body where such a service is provided (for example, you initially need to contact the local government authorities, and after approval, one of the banking institutions).
You can get a loan without providing collateral only if there are guarantors. Thanks to such lending programs, entrepreneurs have a chance to improve the situation in their business by obtaining financial assistance for its development at low interest rates.
A distinctive feature of obtaining this type of loan is difficulty in design.
This is largely due to the fact that such financial assistance for creditors carries a high risk of losing their borrowed funds, so the requirements are very stringent.
Similar lending programs operate in almost all banking institutions in the country.
State programs
Today there is a number of government programs, which allow small businesses to receive profitable loans for the development of their business.
In most cases, we can talk about regional programs that operate only in some regions of the Russian Federation. To be able to participate in one of them, you must contact your local government.
Entrepreneurs who need a little financial assistance should seek help from MFO that provide loans online.
Today, almost without exception, MFOs include the opportunity for an entrepreneur to receive microfinance assistance to develop his business. The only drawback is the daily interest rate.
State guarantee
Every aspiring entrepreneur who was able to stabilize the flow of profit and build a foundation for his stable business activity may apply for government guarantee, which is provided by the Small Business Support Fund.
Thanks to this guarantee option, you can get a loan from any bank at a low interest rate.
Tariffs and interest rates
Each banking institution has their tariff rates and amounts of financial assistance for small business representatives.
Let's look at the proposals in the table.
In fact, all financial institutions without exception have some kind of program to support small businesses. Each of these programs is aimed at providing the entrepreneur with the necessary financial support and therefore includes the most favorable conditions.
The best offers
The most advantageous offer today is the “Business Start” lending program from Sberbank. As collateral the entrepreneur's assets may be.
This program is beneficial in that it is provided exclusively to those entrepreneurs who, in the opinion of the bank, receive a stable profit and are solvent.
Sberbank has been supporting small businesses for a long time and therefore they have many offers for individual entrepreneurs. Their stability in work suggests that they are a reliable business partner who can be trusted.
Must be remembered: if you receive a refusal from one of the banking institutions, you must contact another lender and, if possible, reduce the desired loan amount.
Additional information is in this video.
One of the most common problems that entrepreneurs face is the lack of equity capital. If a businessman does not have sufficient experience, it will be difficult for him to borrow money from companies or individuals. An excellent solution in this situation would be loans to small businesses from the state in 2018, which can be obtained on preferential terms.
Types of government assistance to small businesses
Even in times of economic crisis, the state provides support to start-up businessmen. Loans to small businesses from the state in 2018 can be provided in the following forms:
Ways to get a loan
Microfinance is the simplest method of obtaining government loans. This government support is provided for beginning businessmen. To receive a loan to develop a business from scratch, you need to send a request to a special fund that provides assistance to small businesses. By correctly completing all the documentation and proving the possibility of subsequent repayment, you can significantly increase your chances of receiving a loan.
Microfinance is carried out under the following conditions:
You can also use a guarantee. The SMP Support Fund can become a guarantor, after which the loan will be issued by a bank participating in the implementation of this program.
To get a small business loan from the state in 2018, you must:
A non-repayable subsidy is considered the best option for obtaining a small business loan provided by the state. The program is implemented through the employment service. Its goal is to reduce unemployment.
The main stages of obtaining a loan from the state in 2018
The funds provided by the state have a specific purpose. This means that they cannot be spent on your own needs. Government departments monitor the expenses of enterprises that received subsidies. This means that an unscheduled inspection can happen at any time.
After receiving and spending funds, you are required to report on their intended use. All transactions must have documentary evidence - a payment order, invoice or check. When receiving funds to open jobs, you must send copies of labor agreements to regulatory authorities. If an employee was fired, then within 2 weeks a new employee must be hired to fill the vacant position.
When the report is submitted, a representative of government agencies may come to the entrepreneur to verify the documentation with the availability of the acquisitions made. If the funds are spent for other purposes, the businessman will have to return the amount received in full.
Where can I get a loan?
Subsidizing from the state is carried out through local government employment centers. Also, such activities are carried out by centers for supporting small businesses, which exist in all regions of Russia. They have partnerships with municipal authorities.
In the local administration, you can get a small business loan from the state in 2018. At the next stage, you can write a statement. You can also do this through the employment center in your region. After this, you need to prepare a project plan. It is important to make a number of calculations, for example, the payback period of the business and its profitability. During a special meeting, the submitted application is considered. If the decision is positive, the entrepreneur will be issued a loan.
Let us remind you that the funds provided can be used exclusively for the intended purpose:
Russian cities where you can get a small business loan from the state in 2018
| Arkhangelsk | Kazan | Novosibirsk | Syktyvkar |
| Astrakhan | Kaliningrad | Omsk | Tambov |
| Barnaul | Kaluga | Eagle | Tver |
| Belgorod | Kemerovo | Orenburg | Tomsk |
| Blagoveshchensk | Kirov | Penza | Tula |
| Bryansk | Kostroma | Permian | Tyumen |
| Vladikavkaz | Krasnoyarsk | Petropavlovsk-Kamchatsky | Ulyanovsk |
| Vladimir | Mound | Pskov | Ufa |
| Volgograd | Kursk | Rostov-on-Don | Khabarovsk |
| Vologda | Lipetsk | Ryazan | Khanty-Mansiysk |
| Voronezh | Magadan | Samara | Cheboksary |
| Ekaterinburg | Moscow | Saint Petersburg | Chelyabinsk |
| Ivanovo | Murmansk | Saransk | Chita |
| Izhevsk | Nalchik | Saratov | Yuzhno-Sakhalinsk |
| Irkutsk | Nizhny Novgorod | Smolensk | Yakutsk |
| Yoshkar-Ola | Novgorod | Stavropol | Yaroslavl |
To effectively promote a small business, you may need. The page tells you how to get a loan with bad credit. And it describes in detail how to calculate a loan for building a house at Rosselkhozbank.
The volume of loans to small and medium-sized businesses in Russia in 2017 increased by 15% against the backdrop of lower rates and preferential government programs, Expert RA found out. Since the 2014 crisis, lending to SMEs has been declining for three years
Photo: Kirill Kukhmar / Kommersant
Signs of life
In 2017, Russian banks issued 6.1 trillion rubles to small and medium-sized enterprises. loans - this is 15% more than in 2016, according to a study by the rating agency Expert RA (available from RBC), dedicated to lending to small and medium-sized businesses (SMEs). The sector is showing growth for the first time since 2013, the volume of issuance is the largest in three years, however, SME lending in Russia has still not reached pre-crisis levels: at the end of 2013, 8.1 trillion rubles were issued to SMEs. loans.
Based on data from the Central Bank, the SME loan portfolio in the Russian banking sector has been declining for the fourth year in a row - minus 7% at the end of 2017 (to 4.2 billion). But Expert RA calculated that the negative dynamics were due to changes in the register of small and medium-sized businesses in August 2017. Because of this, more than 600 thousand organizations, some of them with a credit load, ceased to be considered SMEs. If not for this circumstance, the loan portfolio would also have grown for the first time since 2014 - to 4.9 trillion rubles, the authors of the study calculated. The volume of the loan portfolio is less than the volume of loans issued due to the predominance of loans for up to one year in the SME market.
The Expert RA study is based on official statistics from the Central Bank, the results of a bank survey, as well as in-depth interviews with participants in the SME lending market (representatives of 47 banks were interviewed).
Which businesses in Russia are classified as small and medium-sized?
There is a legislative definition for small and medium-sized businesses in Russia. Micro-enterprises should employ up to 15 people, small enterprises - up to 100, medium enterprises - from 100 to 250 people. To be included in the SME group, there are restrictions on revenue - 120 million, 800 million and 2 billion rubles. for micro, small and medium enterprises respectively.
The main reason for the upward trend in the SME lending market is the reduction in interest rates on loans for this category of enterprises. The weighted average rate on long-term loans in this sector decreased over the year from 14.2 to 10.9%, for short-term (up to one year) - from 14.8 to 12.4%.
In addition, in 2017, individual entrepreneurs received access to the already existing state program for lending to SMEs (at 6.5% per annum). Finally, the government approved a new program under which loans to SMEs operating in priority industries will be subsidized from the federal budget at 6.5% per annum (currently real rates on preferential loans are 9.6-10.6% - preferential rate plus bank margin in the amount of 3-4 pp). Priority sectors include agriculture, manufacturing, construction, transport, communications, tourism, healthcare and waste management.
According to Expert RA, not only the volume of lending has increased, but also the number of submitted and approved applications for SME loans. The first indicator is growing by one and a half times for the second year in a row (based on a survey conducted by a rating agency among banks), and the number of actually concluded contracts at the end of 2017 also increased by one and a half times after a decrease a year earlier.
Market for state banks
Considering that state programs remain the main driver of growth in SME lending, banks that are not among the largest have fewer and fewer opportunities to compete in the market for loans to large enterprises. At the end of 2017, the share of SME loans issued by banks from the top 30 by assets reached a historical maximum of 66% (in monetary terms, the SME loan portfolio of the largest banks amounted to RUB 2.8 trillion). The total volume of loans issued by banks from the top 30 to small and medium-sized enterprises in 2017 showed explosive growth - plus 34%, up to 4 trillion rubles. (such dynamics have not happened since 2011).
The leader in SME lending in 2017 was Sberbank - the largest Russian bank virtually single-handedly ensured the growth of the sector in 2017 (without taking into account Sberbank’s indicators, the total portfolio of SME loans would have decreased by 14%). The State Bank increased its SME loan portfolio by 17%, and the volume of loans by 60%. Also in the top 5 largest creditors of small companies at the end of 2017 were VTB, Moscow Industrial Bank, Bank St. Petersburg and Alfa Bank. The fastest growing loan portfolios were Mosoblbank (four times), Russian Capital (plus 174%) and SMP Bank (plus 104%).
In the case of small banks, the situation is exactly the opposite. Over the year, the volume of loans issued to SMEs decreased by 9% (to 2.1 trillion rubles), the loan portfolio - by 24%, to 1.4 trillion rubles. (minimum since 2011).
There are several reasons for the leadership of large banks - they more often participate in state support programs and are more active than small banks in offering preferential terms for debt refinancing to SME borrowers.
What do they borrow for and when will they be paid back?
In 2017, more than half (51%) of loans issued to small and medium-sized businesses were in the trade sector. Banks traditionally lend to this sector most willingly, notes Expert RA. 14% of loans each went to small enterprises in the manufacturing and construction industries, 6% to insurance and financial SMEs. Agriculture in the overall structure of SME lending looks modest (share of 3%), however, participants in the Expert RA survey note an increase in lending to this industry, and some banks (VTB24, Ak Bars, Raiffeisenbank) increased the share of loans in this area by 49- 68%.
Mostly, small companies borrow for a short period (up to a year) - they need money to finance working capital and eliminate cash gaps. However, as Expert RA notes, in 2017 the share of loans for investment projects to small and medium-sized businesses (that is, for a period of more than three years) exceeded pre-crisis indicators, reaching 18% of the total lending volume.
SMEs are still the most unreliable borrowers. The share of overdue debt in the SME loan portfolio is 14.9%. This is much higher than retail loans (7%) and loans to large businesses (5%). They mostly do not repay debts to banks not included in the top 30—their share of overdue debt in this group reaches 21.7% (increased by 6 percentage points over the year).
Growth will continue
“Expert RA” predicts that with stable oil prices, inflation and the continued reduction of the Central Bank key rate, the SME loan portfolio in 2018 will grow by 15%, to 4.9 trillion rubles. (the agency uses official statistics from the Central Bank as its base). At the same time, banks will not rush to ease lending conditions: only 14% of banks participating in the Expert RA survey are ready to take such a step. The rest either do not intend to change approaches to assessing borrowers (57%) or will tighten them (29%).
The main growth in SME lending in 2018 will come from large banks, which will increase credit limits for the highest quality borrowers, Alexander Saraev, managing director for banking ratings at Expert RA, told RBC. The group of SME borrowers with an average level of risk, which medium and small credit institutions traditionally work with, will continue to experience significant limitations in borrowed resources. According to Saraev, it can be expected that, against the background of a decrease in risk appetite among medium and small banks, the funding gap for a wide range of SMEs will increase, despite the overall market growth.
The SME lending market has prospects only for companies that have sufficient and stable account turnover, says Fitch senior analyst Alexander Danilov. Only in this way can the banks that service these companies more or less reliably assess their solvency, while their reporting is uninformative. “For clients on the street, getting a loan will be problematic - banks are reluctant to do this because it is difficult to assess the risks,” Danilov clarifies.
RBC interviewed representatives of Russian banks with capital of 200 billion rubles. on their assessment of the prospects for the SME lending market. The leader in lending to the sector, Sberbank, is going to increase its portfolio of SME loans in 2018 from the current 1.3 trillion rubles. by 250 billion rubles. To do this, the bank plans to develop online lending and credit analysis technologies based on the use of big data. The bank's press service noted that Sberbank launched online lending to small businesses in March. Other banks that responded to RBC's request (Promsvyazbank, Uralsib, SMP Bank) predicted that the SME lending market will grow, and they do not intend to change their approaches to assessing the quality of the borrower. “We expect that by the end of 2018, rates on SME loans may fall. The reason for this will be a rate cut by the Central Bank. As a result, the growth of lending to the SME segment in 2018 will continue and reach a level of 9-10%,” predicts Kirill Tikhonov, vice president and managing director for small business development at Promsvyazbank. Lending to SMEs will grow due to “improving the situation in the Russian economy” and reducing loan rates, he believes.