A new loan program to support employment at 2% is launched in Russia

On June 1, a program of preferential lending to enterprises at a rate of 2% per annum was launched in Russia. Companies from affected sectors and socially oriented NPOs, as well as companies from industries requiring support to resume operations will be able to count on loans. The entrepreneur can direct the received money to carry out entrepreneurial activities, including the payment of wages to employees, or repay previously taken loans, including interest-free loan for payment of labor.

Representatives of small, medium and large businesses from affected sectors of the economy, as well as socially-oriented NPOs included in the corresponding register of the Ministry of Economic Development of the Russian Federation will be able to take advantage of preferential loans. The exception is individual entrepreneurs without wage earners. At the same time, it is enough for small and micro-business enterprises to comply with the list of affected sectors for additional OKVED. It is worth noting that at the time of conclusion of the loan agreement the borrower should not be in bankruptcy proceedings, if the borrower is an individual entrepreneur, then at the time of applying for a soft loan, its activity should not be terminated.

The loan amount is calculated based on the formula:

(one minimum wage + insurance contributions for each employee monthly for six months) * number of employees * base period (the base period is the period from the date of conclusion of the contract until December 1).

It is worth noting that the loan will be provided not in full immediately, but in monthly installments, which will ensure the preservation of employment and timely remuneration of employees of borrowing enterprises. Attracted credit funds can be used both directly to pay salaries and to refinance or repay a previously taken interest-free salary loan.

One can apply for a loan from June 1 to November 1, 2020, and the sooner the loan application is submitted, the greater the available loan amount. A loan is granted for a period of not more than 1 year.

The loan conditions depend on the periods during which the loan agreement is valid. The rules for issuing a loan provide for three periods:

Mandatory base period

Lasts until December 1, 2020. At this time, the loan has a rate of no more than 2% per annum. Interest accrued for the base period is carried forward to the principal on the end date of the base period. At the end of the base period, there are two options: writing off a loan or repaying it.

If, according to the results of at least one month of the base period, the number of employees of the borrower decreased by more than 20% compared with the number of employees as of June 1, then in this case the repayment period starts. The borrower must repay the loan in three equal installments for three months: December 28, 2020, January 28 and March 1, 2021. The repayment period also starts if a bankruptcy procedure has been introduced in respect of the borrower before November 25, the activity of the borrowing company is suspended, or the individual entrepreneur ceased to operate.

If the company or individual entrepreneur retained at least 90% of the employees, the monitoring period begins.

Monitoring period

The monitoring period begins if the borrower continues its activities and has kept personnel within the limits established by the rules. This period lasts from December 1, 2020 to April 1, 2021.

At this time, the borrower also pays nothing to the bank, the final rate is not higher than 2% per annum, accrued interest on the loan is transferred to the main debt at the end of the monitoring period.

The entire loan debt, including interest, will be written off completely if, as of the moment of receiving the loan until March 1, 2021, the number of employees at the end of each month will be at least 90% of the staff, the bankruptcy procedure has not been introduced for the borrower, and the individual entrepreneur has not stopped its activities. Also a prerequisite for the full write-off of the loan and interest on it is the average salary of one employee set within not lower than the minimum wage.

In turn, if during the monitoring period the number of employees at the end of each month does not fall below 80%, the credit will be written off by half, the rest will be paid by the borrower.

Optional three-month repayment period

It can occur both after the base period and after the monitoring period. It does not occur if the conditions for writing off the loan are met.

The level of employment in companies will be controlled using the specialized blockchain platform of the Federal Tax Service, which has already been launched. The service operates with data on insurance premiums that entrepreneurs transfer to the Pension Fund every month, thereby confirming the number of employees.

According to the estimates of the Government of the Russian Federation, the total volume of loans issued in Russia under the program of soft loans at 2% should be at least 248 billion rubles. 5.7 billion rubles will be allocated to banks that joined preferential lending to businesses and NPOs at a rate of 2% to recover lost profits.

As of June 1, 2020, such loans are already issued by: Sberbank PAO, ENERGOTRANSBANK AO, RNKB Bank PAO, Promsvyazbank PAO, VTB PAO, Kuban Credit OOO, Kuznetskiy Bank PAO, “Yenisei United Bank” AO, AK BARS BANK PAO, CHELYABINVESTBANK PAO, CHELINDBANK PAO, Altaykapitalbank OOO, Energobank AO, SIBSOTSBANK OOO, KOSHELEV-BANK AO, AlMAZERGIENBANK AO, NBD-BANK PAO, MSP Bank, Center-invest PAO, Databank AO. The list of credit organizations will be replenished, it is planned that all those banks that already take part in the program of interest-free salary loans will be included in the program as quickly as possible.

VEB’s state guarantee in the amount of 85% of the loan amount is also provided under loan agreements, this will allow banks to expand the range of recipients of such a loan.