Expanded Preferential Lending Options for Defense Sector
The Ukrainian Ministry of Defense has driven an initiative to broaden access to low-interest loans for companies within the defense-industrial complex. The Cabinet of Ministers has approved an increase in the maximum loan amount for working capital from 100 million to 500 million UAH. This new policy introduces tiered interest rates based on whether a company holds a government contract and the size of the loan.
Interest Rate Structure and Eligibility
For enterprises engaged in fulfilling state defense contracts, the subsidized loan interest rate is fixed at 5% annually. However, the maximum loan amount for these companies cannot exceed the value of their active government contracts. For companies without such contracts, the interest rate varies according to the loan amount as follows:
- Up to 200 million UAH – 5% per year;
- Between 200 million and 400 million UAH – 7% per year;
- From 400 million up to 500 million UAH – 10% per year.
Additionally, loans designated for investment purposes carry an interest rate of up to 5% annually. The same 5% rate applies to preferential financial leasing agreements.
Anna Hvozdiyar, a Ministry of Defense official, emphasized: 'Enhancing the capabilities of Ukraine’s defense industry directly depends on enterprises having sufficient access to financial resources. These updated terms empower manufacturers to reliably fulfill government contracts, expand production capacity, and increase the output of Ukrainian weaponry.'
This policy adjustment aims to provide critical financial support to defense-sector companies, enabling them to grow and meet the demands of strategic government orders.
By improving access to affordable credit, the reform is expected to strengthen the stability and growth of Ukraine’s defense-industrial complex amid rising military demands. Securing such funding will not only help companies complete current contracts but also invest in innovative technologies, boosting the global competitiveness of Ukraine’s defense manufacturing.