How can an entrepreneur in Ukraine obtain a repayment holiday?

A payment holiday is, essentially, a break from making repayments to the bank. During this period, the business owner does not make any repayments, and no interest or fees are charged on the loan. The start of a payment holiday must be approved by the bank, so the business owner must first submit an application to the financial institution. In the current global situation caused by the spread of the virus and the lockdown, this is a practical form of support for businesses.

Arranging payment holidays during the lockdown: key points

It should be understood that a repayment holiday granted by a bank does not constitute a ‘forgiveness’ of financial obligations. Once the grace period established during the lockdown has expired, interest and the principal of the loan must be repaid. Otherwise, borrowers risk damaging their credit history. The terms of deferral vary across different banks in Ukraine.

In addition to payment holidays, some banks have offered their customers favourable options for restructuring their loan obligations. Each specific case is considered on an individual basis, as the following factors are taken into account:

• the company’s latest financial statements;
• the company’s financial position;
• the vulnerability of the sector in which the company operates;
• the prospects for business recovery.

The start of loan restructuring may be initiated by the bank or the customer. It should be noted that these conditions apply only to those borrowers who have genuinely suffered as a result of the introduction of lockdown measures and restrictions. The customer must provide documentation showing that their income has fallen significantly. All interactions with banks during the lockdown period take place online, so documents are provided in electronic form only.

If you have a business that has been affected by restrictions on business activities during the lockdown, book a legal consultation with Svarog. Experts with extensive experience will help you find a way out of this difficult situation and resolve your debt issues!