Over 2024–2025, the government introduced special financial instruments to support defence manufacturers — preferential loans and preferential financial leases.
The aim is to help producers of weapons and military equipment operate steadily, scale up production, and modernise their facilities.
Who Is Involved
The mechanism involves three key players:
- The Ministry of Defence acts the main budget holder, responsible for forming and implementing the programme and coordinating its operation.
- The National Development Institution (formerly the Business Development Fund) administers compensation, signs agreements with banks and leasing companies, and transfers funds to cover interest and fees.
- Authorised banks and lease providers assess enterprises, provide loans and leases, and monitor the proper use of funds.
Who Can Apply
Support is available to defence enterprises designated as critical to the operation of the economy during the special period.
Preferential Loans
Launched in 2024, the loan programme supports the scaling of arms and equipment production.
Loan Limits & Purposes:
- Investment purposes: up to UAH 500 million, for up to 5 years.
- Working capital: up to UAH 100 million, for up to 3 years (with plans to raise the limit to UAH 500 million).
Funds may be used for development, production, repair, modernisation, and disposal of weapons, military and special equipment, ammunition, and components.
Cost Reduction:
- Base bank rate: UIRD + up to 5% (capped at 23%).
- The state compensates for the difference, so enterprises effectively pay only 5% per year.
Guarantees:
Loans may be backed by state guarantees under Government Resolution No. 723, with the Ministry of Defence facilitating portfolio guarantees for the defence sector.
Restrictions:
Collateral cannot include deposit rights or government bonds.
Preferential Financial Leases
Introduced in December 2025, the lease mechanism helps enterprises quickly renew equipment without heavy upfront costs. Authorised lease providers are being selected, but manufacturers can already prepare documents.
Programme Parameters:
- Financing: up to UAH 500 million.
- Term: up to 5 years.
- Base fee: up to 23% annually.
- Enterprise pays 5% annually; the rest is covered by the state.
Eligible Assets:
- Specialised and general-purpose equipment
- Mobile production platforms
- Dual-use machinery
- Technological systems
- Automation tools
- Electronic communications
- Cyber protection
- Transport for commercial and manufacturing applications
- Rail wagons and buses
- Non-residential property (not for third-party transfer).
How the Lease Will Work:
1. Your company applies to a bank or lease provider.
2. The bank checks your company’s solvency and the proposed leased asset.
3. The bank contacts the Ministry of Defence to confirm your company’s status within the defence industry.
4. Once approved, a contract is signed.
5. The bank purchases the leased asset, registers it, and arranges insurance.
6. Your company pays an advance of at least 20%.
7. The leased asset is handed over for use by your company.
8. Your company makes monthly payments.
9. Once the full amount has been paid, ownership of the asset passes to your company.
Additional Conditions:
- Possible principal repayment deferral up to 12 months
- One-off commission up to 0.75%
- Default interest rate capped at base fee + 5 percentage points
- Non-compensated commissions (ceiling rates): property (1%), transport (4%), imported equipment (4%), industrial equipment/generators (2%).
Authorised Banks & Lease Providers
Currently authorised banks include Oschadbank, Ukreximbank, FUIB, MTB Bank, and Bank Credit Dnipro, with more to be added.
Current Results
So far, 108 loans worth UAH 6.665 billion have been issued, with another 81 applications worth UAH 6.32 billion under consideration. Funding is provided under Budget Programme 2101480 “State financial support for defence enterprises”.
Frequently Asked Questions
Can all defence enterprises apply?
Applications may be submitted by defence enterprises designated as critical to the operation of the economy during the special period.
Are both instruments available to all defence enterprises?
Yes. These are two separate forms of state support.
What interest rate does the enterprise actually pay?
Enterprises pay 5% per year; the remainder is covered by the state.
Is it possible to obtain a loan with a state guarantee?
Yes, this option is provided for under government decisions.
Is collateral required?
Collateral may be required, but deposits and government bonds cannot be used as security.
What advance payment is required for a lease?
At least 20% of the value of the leased asset.
Can payments be deferred?
Yes, for up to 12 months.
Where should enterprises apply for preferential loans?
Apply through authorised banks and lease providers — with more institutions on the way.