5-7-9% Recovery Loans for Businesses Affected by Russian Attacks: Terms for the Veterinary Sector

Businesses whose property has been damaged or destroyed as a result of Russian military attacks may access financing of up to UAH 150 million under Ukraine’s state programme “Affordable Loans 5-7-9%”. Under the recovery track, the interest rate is 0.1% per annum for the first two years. The programme is available to micro, small and medium-sized enterprises, including businesses operating in the veterinary sector.

For the veterinary sector, the programme may be particularly relevant where missile or drone attacks have destroyed warehouses, veterinary medicinal products, feed, feed additives, laboratory materials, clinic equipment, vehicles or other assets required for business operations.

Term	Programme conditions
Maximum amount	Up to UAH 150 million, but not more than the documented amount of losses.
Interest rate	0.1% per annum for the first two years; thereafter 5%, 7% or 9%, depending on the business category and applicable programme conditions.
Working capital	The programme allows working-capital financing. The standard 20% limitation does not apply to the recovery track.
Maximum term for working-capital financing	Up to 3 years.
Payment deferral	The bank may provide a deferral of principal and interest payments for up to 12 months.
Where to apply	Directly to one of the authorised banks participating in the programme.

Who can apply for a 5-7-9% recovery loan

The programme is available to micro, small and medium-sized enterprises (MSMEs) that comply with the requirements of the state support programme. The business must be registered in Ukraine and comply with requirements concerning ultimate beneficial ownership, sanctions and links with the aggressor state. The authorised bank makes the final assessment of eligibility and creditworthiness.

In the veterinary and related sectors, eligible businesses may include, among others:

manufacturers of veterinary medicinal products;
importers and distributors of veterinary medicinal products;
veterinary pharmacies;
veterinary clinics and private veterinary practices;
veterinary laboratories;
manufacturers and suppliers of feed and feed additives;
livestock farms;
poultry farms;
breeding enterprises and farms;
aquaculture businesses;
other MSMEs whose activities are related to veterinary medicine, animal health, animal production or animal keeping.

For agricultural producers, the programme also provides for registration in the State Agrarian Register.
This list is not an official exhaustive list of beneficiaries. It provides examples of veterinary-sector businesses that may potentially use the programme, provided that they meet the general eligibility criteria.

What kind of damaged or destroyed property is covered

A separate priority track of the programme is aimed at the reconstruction and/or restoration of MSME property destroyed or damaged as a result of military aggression. The fact of damage or destruction must be documented.

For veterinary-sector businesses, this may include, for example, warehouses, equipment, refrigeration and laboratory equipment, vehicles, property of veterinary clinics, property of livestock and poultry farms, and other assets required to resume operations.

How much can a business receive?

The maximum loan amount under the recovery track is UAH 150 million.

However, the loan amount cannot exceed the value of the documented losses indicated in damage or destruction reports or in documents confirming damage or destruction of movable property.

For example, if a business has documented losses of UAH 20 million in destroyed inventory and other assets, the recovery loan for those losses cannot exceed UAH 20 million.

An important advantage is that a loan received under the dedicated recovery track is not counted toward the general maximum lending limit applicable to other tracks of the 5-7-9% programme.

What is the interest rate?

For businesses receiving financing under the recovery track, the preferential interest rate is 0.1% per annum for the first two years.

After that period, the applicable rate is 5%, 7% or 9% per annum, depending on the business category and other programme requirements, including employment-related conditions where applicable.

What is the maximum term for working-capital recovery financing?

Where the loan is used for working-capital financing, the maximum loan term under the current programme is up to 3 years.

The bank may also provide a deferral of principal and interest payments for up to 12 months.

Government communications on the launch of the recovery programme also referred to a maximum financing term of up to 10 years.

This applies to the broader recovery mechanism, which also includes investment purposes. For financing specifically aimed at working capital, the current programme provides for a maximum term of three years.

What documents can be used to confirm the losses?

The programme lists, among others, the following documents that may be used to confirm damage or destruction:

reports on destruction or damage indicating the cause;
reports confirming damage to or destruction of movable property;
an extract from the Unified Register of Pre-Trial Investigations confirming the opening of criminal proceedings;
data from the state register of damaged and destroyed property;
a property valuation report or valuation act.

If veterinary medicinal products were destroyed, it is also advisable to prepare an inventory list, accounting records showing stock levels, warehouse records, invoices and delivery notes, a detailed list of destroyed products including quantities and, where possible, batch numbers, documents confirming the value of the products, a write-off act, photo and video evidence, and documents issued by the State Emergency Service, police or other competent authorities where available. This is not a separate exhaustive list established by the programme, but a practical set of supporting documents that may help confirm the composition and value of the destroyed inventory.

How to apply for a 5-7-9% recovery loan

Document the damage or destruction and obtain evidence that the losses resulted from military aggression.
Conduct an inventory of losses and prepare a detailed list of destroyed or damaged property and inventory.
Confirm the value of the losses using accounting records, invoices, delivery notes, valuation documents and other evidence.
Determine the required amount of financing. The requested amount may not exceed the documented value of the losses.
Apply to an authorised bank participating in the Affordable Loans 5-7-9% programme.
Explain the intended use of the funds. For a distributor of veterinary medicinal products, this may include purchasing new stock to replace products destroyed in an attack.
Undergo the bank’s credit assessment. The bank verifies compliance with the programme, the documents confirming the losses, the proposed use of funds and the borrower’s creditworthiness.

How long does a business have to apply?

According to the official Government communication announcing the programme, an application for a recovery loan may be submitted through an authorised bank within two years from the date when the damage or destruction was officially recorded.

Businesses affected by attacks are therefore advised not to delay documenting their losses and contacting a participating bank.

Frequently Asked Questions

Can veterinary clinics use the 5-7-9% recovery programme?
Yes, provided that the veterinary clinic qualifies as an MSME, meets the general programme requirements and has documented damage to or destruction of its property.

Can importers and distributors of veterinary medicinal products apply?
Yes, provided that they meet the MSME criteria and the other programme requirements. The final lending decision is made by the authorised bank.

Can the loan be used to replace destroyed stocks of veterinary medicines?
The programme allows working-capital financing. Therefore, a business may approach an authorised bank regarding the financing of replacement inventory. The specific purchase must be approved by the bank as an eligible use of the recovery loan.

What is the maximum loan amount?
Up to UAH 150 million, but not more than the documented value of the losses.

What is the interest rate?
0.1% per annum for the first two years, followed by 5%, 7% or 9% depending on the applicable programme conditions.

Where should an application be submitted?
Directly to one of the authorised banks participating in the Affordable Loans 5-7-9% programme.

Official sources

Publications

5-7-9% Recovery Loans for Businesses Affected by Russian Attacks: Terms for the Veterinary Sector