One of the most topical issues today in the agricultural sector is to find sources for business financing. After all, regardless of the development stage of agrarian business, in order to be competitive it is necessary to develop, for which it is necessary to find new sources of income and investments. The team of Ukrainian Agrarian Centre will help you attract additional investments to successfully develop agrarian business.
Tentatively, methods of financing of agrarian business can be divided into two groups:
The classic method of finding financial resources for business development is to get a bank credit or work through financial leasing companies. In the current socio-economic situation of Ukraine, the classic financing method is not accessible to all farmers. There are several reasons: the highest interest rate on the European continent, unwillingness to puzzle out complex and intricate mechanisms of credit granting (hidden charges, inadequate penalties, and restrictions on the use of credit facilities), lack of adequate property for collateral or guarantors, lack of positive credit history in the bank. In view of this, in respect of financing farming companies can count only on themselves, i.e. on profits from their activity. This greatly reduces the potential for development of a farm enterprise.
The Ukrainian Agrarian Centre team believes that in addition to bank credits farming companies should also use other available opportunities to obtain resources for development, which include:
Actually, there are funds allocated by foreign public or private entities for achievement of certain goals, which have a socially important effect. Grants are usually allocated on a non-repayable basis, i.e., money received under a grant need not be repaid. To receive a grant it is necessary to participate in the respective competition.
Recently, number of grants has increased considerably, which is primarily connected with the increased activity of the USA and the EU in Ukraine. Nowadays, most grants for the agricultural sector are aimed at achieving such objectives as increasing energy efficiency and development of small and medium businesses. As for the size of a grant, it ranges from tens of thousands of euro to 10 million euro.
International programs and credits from international banks
If agrarian business needs attraction of a bigger amount for the implementation of the planned project, it is necessary to pay attention to such mechanisms as cooperation under international programs and getting a credit from international commercial financing bank through investment funds, or from such institutions as the European Bank for Reconstruction and Development or the World Bank. Agrarian business will be definitely interested in transparent cooperation conditions, low interest rates for the use of funds and scope of possible financing.
It is necessary to use all possible mechanisms of attraction of additional investments to build an export-oriented, highly-efficient, innovative agrifood sector in Ukraine.
Ukrainian Agrarian Centre experts are ready to find for you the necessary balance between the classic and alternative methods of attracting financial resources to the business of your life!