By Kateryna Morozova, Head of the Southern Ukrainian Office, European Business Association  

"Financial assistance to businesses during wartime is exceptionally crucial. We present a selection of relevant grant programs for startups, SMEs, and medium to large enterprises. 

The challenges of today pose threats not only to our security and economic well-being but also to the resilience of our entrepreneurial spirit. War times create unique challenges for the business community, and the absence of stability demands new approaches and collective solutions. In these challenging conditions, access to funding becomes vital for the recovery and development of enterprises. Let's explore the financial assistance programs available to small, medium, and large business representatives in 2024. "

The essence of grant assistance: from recovery to expansion 

The conditions of war create significant difficulties for society and business, impacting the economy as a whole. War inflicts both physical and economic losses, heavily straining financial resources. Grant assistance becomes a crucial tool for recovery and further development. 

Firstly, grant assistance is a necessary component for recovering lost assets. Destroyed infrastructure includes physical structures and technological systems essential for efficient business operations. Grant assistance may involve compensation for restoring factories, offices, warehouses, and other war-affected facilities. Companies face financial challenges due to lost turnover, clients, and market outlets. Grant assistance can be used to ensure the liquidity of enterprises, helping them stay afloat, including paying salaries, purchasing raw materials, and maintaining business processes. 

Grant assistance can help businesses not only in recovery but also in further expansion. Financial support and financing catalyze the implementation of new projects, fostering business development and diversification. This may involve introducing new technologies, expanding production capacities, or developing new products and services. 

Therefore, we present a selection of relevant grant programs beneficial for startups and large enterprises. 

State Grants 

Today, public and private funds are often involved in supporting businesses. Entrepreneurs should explore opportunities to obtain grants, subsidies, or other financial assistance from these sources. Additionally, it is vital to understand the terms and requirements imposed on such programs. 

One of the most important initiatives is financial support expansion for businesses. Plans include creating new loan and grant programs to support startups and small business development. Additional resources and simplified procedures for providing financial instruments promise to ease access to capital for entrepreneurs. 

Currently, the Odesa Regional State Administration (RSA) is conducting a competition among small and medium-sized businesses to receive partial interest compensation for loans taken for investment projects. Eligible entities for compensation include small and medium-sized businesses:

1. Registered with the state tax authorities and operate in the Odesa region. 

2. Without overdue obligations for salary payments and debts to the budget and state target funds. 

3. Not in the stage of bankruptcy or liquidation. 

4. Engaged in the following types of economic activities: processing industry, supply of electricity, gas, steam, and conditioned air (projects involving the implementation of energy-saving technologies), transportation, warehousing, postal and courier activities. 

The program provides compensation for a portion of the interest rate on loans directed towards purposes such as the purchase of equipment, machinery, and other production assets; modernization of the technological production process to reduce its cost; implementation of energy-efficient technologies in the production process; development of new types of products (goods). Participants in the program receive compensation from the regional budget in the amount of half the interest rate specified in the credit agreement but not exceeding 10% per annum for loans in hryvnia and 5% per annum for loans in foreign currencies. According to the program's conditions, the maximum monthly compensation for the interest rate will be 70,000 hryvnias. Entrepreneurs whose loan amount does not exceed 7 million hryvnias and whose loan term is 3 years can participate in the preferential lending program. 

The deadline for submitting applications is February 12, 2024. 

Read more. 

State Program 5-7-9  

The program applies to enterprises with annual revenue up to 50 million euros in the following areas: agro-sector, production processing, relocation of enterprises to safe regions, reconstruction, business expansion, replenishment of working capital, support for sole proprietors, repair or replacement of damaged energy infrastructure of thermal power plants and combined heat and power plants due to combat actions, energy services to increase the energy efficiency of state and municipal property objects. Loan terms: up to 10 years, investment loan up to 3 years, working capital loan. Interest rate: from 1%, depending on the purpose. Loan amount up to UAH 150 million per group of related entities, commission fee 1.5% of the loan amount. 

Exporters' Financing from the Export Credit Agency  

The program aims to stimulate the export of goods (works, services) of Ukrainian origin. The program operates for financing foreign trade contracts involving the export of goods (works, services) of Ukrainian origin. The production of Ukrainian goods with subsequent export according to the list of specific commodity groups according to the Ukrainian Classification of Goods for Foreign Economic Activity (UCG FEA). Loan term: up to 12 months. Loan amount: up to UAH 90 million (not more than 85% of the value of the foreign trade contract).   

Financing under a Guarantee Agreement with the European Investment Bank, European Investment Fund 

The program aims to facilitate access to financing for clients of micro, small, and medium-sized businesses by simplifying collateral requirements. Loan term: up to 60 months (but no later than 2031). Loan amount: up to 5 million euros (or equivalent in hryvnias/US dollars). Purpose: creation/purchase of fixed assets of a capital nature, replenishment of working capital. Loan currency: hryvnia, euro, US dollar. Loan security: 70% is guaranteed by the EIB, while the remaining 30% is secured by collateral/mortgage of movable and/or immovable property.

Credit Program with a Grant Component 

The program aims to create economic opportunities for Ukrainian SMEs by providing bank loans with a grant component to carry out economically necessary types of production activities, with a focus on de-occupied regions and relocated enterprises in the controlled territory of Ukraine. The maximum project amount is up to UAH 9.3 million (excluding VAT). Priority sectors: relocated enterprises, de-occupied territories, processing industry, textile production, food products, export, acquisition of production equipment, and machinery. It is important to note that financial support programs may vary depending on the country and region, and their terms and availability may change over time. Entrepreneurs can obtain detailed information about obtainable programs from relevant government authorities, business support agencies, or business communities. 

International Grant Programs: Development Initiatives from the European Union, USAID, etc. 

Grant programs from major international donors such as the European Union, USAID, and others have become an essential tool for Ukraine to implement pivotal projects and achieve sustainable development at a time when businesses continue to struggle for their existence and the sovereignty of our state. 

European Union Grants: "Horizon Europe" Program and Transnational Initiatives 

"Horizon Europe" is a program that funds scientific and research projects in various fields. It sets ambitious goals such as new technology development, innovation stimulation, and addressing global challenges. The grant program offers Ukrainian scientists and innovators opportunities to realize their ideas and contribute to scientific and technical progress. This strengthens Ukraine's scientific potential and technological development to address global challenges.

Projects and initiatives of "Horizon Europe" for Ukraine include: 

1. Medical Research: Funding projects to develop new diagnostic and treatment methods, promoting national health.

2. Modern Energy Technologies: Projects developing renewable energy sources and promoting energy conservation to reduce emissions and improve efficiency. 

3. Climate Change Research: Grants for researchers studying climate change and developing adaptation strategies. 

4. IT and Artificial Intelligence: Programs aimed at information technology development, including artificial intelligence, to address modern challenges. 

USAID: Grants for Competitive Economy and Agricultural Development 

USAID actively influences the economic development of Ukraine through the "Competitive Economy of Ukraine" program. This program provides financial support to enterprises to increase their competitiveness in the global market. 

The USAID program "Competitive Economy of Ukraine" has been operational since 2019 to enhance the competitiveness of Ukrainian small and medium-sized enterprises in Ukrainian and international markets. It helps establish a simplified and transparent business environment, enabling Ukrainian companies with opportunities to benefit from international trade advantages. After the full-scale Russian invasion in February 2022, the program focused its efforts on preserving Ukraine's economic stability and restoring the Ukrainian economy affected by aggression. 

Who is eligible? The grant program focuses on the sectors of information technology, engineering, manufacturing, services, and creative industries. Simultaneously, the program is open to applications to support other sectors that meet the criteria of this request. The grantee's activities may focus on such needs as improving business processes and models, building organizational potential, and developing production, sales, digital, and trade opportunities. 

These needs may include IT solutions, product development, and innovation, establishing or restoring supply chains, enhancing staff training and support, improving online marketing and promotion in domestic and international markets, increasing business competitiveness, improving access to financing for small and medium-sized enterprises, and similar activities related to business continuity and recovery. 

The program plans to provide approximately UAH 36 million by awarding up to 50 grants. Each grant is expected to range from UAH 600,000 to UAH 1,200,000. 

How to Participate? Complete the application form on the USAID website. The application process consists of two stages. The applicant submits the concept, budget, and registration documents of the applicant company. If the applicant meets the evaluation criteria, they will be officially notified of passing the first stage and invited to submit a full application.

A separate program, USAID Agro, focuses on supporting the agricultural sector by implementing innovative technologies and improving the quality of life for rural populations. The program operates in Ukraine, excluding territories temporarily not under the control of the Ukrainian government and areas with active combat. 

Tasks within this subgrant program will focus on developing auxiliary functions and services in the following value-added chains of the AGRO Program: cereals and oilseeds, fruit and vegetable, confectionery and craft production, meat and dairy, and aquaculture. 

Subgrant funds may be allocated for: 

1. Compensation for the team's labor payment fund to support relevant services, including monitoring pesticide handling in compliance with current Ukrainian legislation and PERSUAP. 

2. Reimbursement for technological, agronomic, and other consultancy support costs. 

3. Expenses for conducting an information campaign and events to promote service offerings among end-users and/or partners. 

4. Services related to the rental of equipment and machinery. 

Grant Programs for Startups: The Key to Innovation and Development 

Startups embarking on their journey in the business world often face challenges due to limited financial resources for developing and implementing their ideas. In such cases, grant programs become a crucial instrument, providing startups with the opportunity not only to obtain necessary funds but also to gain recognition and expert support and attract the attention of investors. In this context, let's explore several prominent grant programs for startups that contribute to their success and development. 

Grants from the Ukrainian Startup Fund: Target Group: Ukrainian startups and enterprises. Main Criteria: - Innovativeness: Projects should offer innovative solutions and have the potential for development. - Potential Impact: Evaluation of the project's potential impact on the market and society. - Team of Professionals: Assessment of the team's qualifications and experience. The Ukrainian Startup Fund provides financial support and expert resources for Ukrainian startup development. The grants of this program help companies reach a new level of innovation and competitiveness.  

Grants from EIT Manufacturing: Target Group: Innovative startups in the manufacturing sector. Main Criteria: - Revolutionary Ideas for Production Optimization: Evaluation of the degree of innovation and potential impact on production. - Partnership with Industrial Enterprises: Importance of collaboration with key players in the industry. EIT Manufacturing funds startups specializing in manufacturing and innovative technologies. The program aims to support startups that can improve the efficiency and competitiveness of production. Financial assistance in times of war is a crucial link in the chain of economic recovery. By considering various opportunities and tools, entrepreneurs can find solutions for the recovery and expansion of their businesses. It is crucial to recognize that financial assistance offers more than just funds; it provides an opportunity for developing new strategies and innovations. Collaboration and interaction help entrepreneurs withstand the test of time and ensure the stability of the economic environment, even in times of war.  

Information about the mentioned grant programs was presented during the online meeting of the EBA Southern Ukrainian Office "Supporting Entrepreneurs in Times of War 2024" within the project "In Search of Investments." Among the invited experts at the event were the representatives of the "Regional Development Agency of Odesa Region" (further - the RDAOR): Director of the RDAOR Sergiy Kononeko, Head of the Grant Office of the RDAOR Irina Lazarenko, Consultant of the Grant Office of the RDAOR Ivanna Laskurychik.