Time for difficulties: businesses have become 1.5 times more likely to ask for loan easing

Small companies have become one and a half times more likely to turn to banks to ease loan conditions — in the fourth quarter, almost every tenth company with debts (56 thousand organizations) applied for restructuring, Izvestia found out. The number of such applications is an important indicator that the Central Bank uses when making key decisions, said Elvira Nabiullina, head of the Bank of Russia. Due to high interest rates, companies are having more and more problems paying off debts. How this may affect the March decision on the key issue is in the Izvestia article.

How does a business restructure loans

By the end of 2024, the small and medium-sized enterprises (SMEs) sector had sharply increased its problems with loan repayment. From October to December, almost 56 thousand companies applied for loan restructuring, which is almost 40% more than in the third quarter, according to the information bulletin of the Central Bank (Izvestia studied it).

Restructuring is a change in the terms of a loan for those who find themselves in a difficult situation. However, this does not mean that borrowers will completely stop servicing their debt to banks, said Pavel Samiev, member of the Presidium of Opora Russia and Chairman of the Financial Markets Committee. There are several ways to solve the problem. For example, you can delay repayment — this will allow you to temporarily avoid paying off debts. Or increase the term: then the total loan repayment period will increase, and the monthly payment amount will decrease.

According to the most recent data from the regulator, by January 1, 2025, 646 thousand SMEs had debts. Thus, almost every tenth small company with loans submitted applications for restructuring.

For the whole of 2024, banks received about 167 thousand applications for loan terms changes. At the same time, financial organizations carried out only 44.5 thousand restructurings totaling 520 billion rubles, according to the document of the Central Bank. The regulator's press service clarified to Izvestia: if we talk about the volume of restructured loans, and not about the number of debt problems for businesses, then against the background of the entire loan portfolio to legal entities, it is insignificant - less than 2%.

Banks are reluctant to comment on restructuring issues. In the "House.Russian Federation" Izvestia was informed that in the second half of 2024, they received only a few applications. As noted by Anna Kornelyuk, Vice president of the financial organization, all requests for restructuring are accepted, then clients are given credit holidays of up to six months.

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The head of the Central Bank, Elvira Nabiullina, also spoke about the increase in restructuring requests from small companies at a press conference following the key rate meeting on February 14.

"In general, the business remains financially stable. We are also closely monitoring, among other things, how much the growth of applications to banks for restructuring increases or does not increase. So far, we have seen an increase in applications for restructuring in the segment of small and medium—sized businesses, which, of course, is important," said the chairman of the Bank of Russia.

In percentage terms, the largest number of applications for simplification of loan conditions are for medium- and long-term loans. And in terms of industries — to manufacturing enterprises, Pavel Samiev believes. In other words, we are talking about the real sector of the economy.

How entrepreneurs repay loans

The Central Bank is confident that good profits allow most companies to service loans even at higher interest rates. This is stated in the summary of the key discussion, published on February 26. However, they admit that it is necessary to monitor the situation in the credit market, as enterprises with a high debt burden may face difficulties.

The advance payment of government contracts, which the Ministry of Finance провел in January. In other words, the companies received the money and sent it to repay the loans. As a result, not all the funds reached the economy, and much of it settled in banks.

At the same time, the demand for business loans is still quite high - last year the total debt increased by 12%, said Natalia Milchakova, a leading analyst at Freedom Finance Global. This means that small and medium-sized businesses are going through a difficult period of tight monetary policy. And the sharp increase in demand for simplification of conditions confirms this fact.

Pavel Samiev from Opora Russia is confident that if borrowers do not return to a normal schedule for fulfilling their loan obligations after the restructuring, this may lead to delays and deterioration in portfolio quality indicators. As a result, financial institutions will be reluctant to approve new applications because they will be aware of the risks of non-payment, says Alexei Krylov, an expert at the Council on Financial, Industrial and Investment Policy of the Chamber of Commerce and Industry of the Russian Federation.

How does a business operate in conditions of high loan rates

SMEs are asking to restructure loans because they were previously forced to take them at a high rate and in special macroeconomic conditions, Alexey Krylov drew attention. The business was unable to earn enough to service its debt, and the purchasing power of customers also decreased, he added.

Most of the loans were provided to SMEs at a floating rate — "a key plus 3-7 percentage points," explained independent expert Andrei Barkhota.

— As the key rate increased, the loan rate automatically increased. This led to a significant increase in monthly payments for servicing previously taken loans. As a result, all this made it impossible not only to borrow new loans for small businesses, but also to service previously taken loans," he explained.

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Loans are now available either for those who have huge margins, or for those who lack very small amounts at the moment, Oleg Skapenker, Associate professor of the Department of Global Financial Markets and Fintech at Plekhanov Russian University of Economics, is convinced.

According to Alexander Isaevich, CEO of SME Corporation, restructuring requests may appear in those regions where it is currently problematic to conduct business, for example, in the border areas near which military operations are taking place, as well as in Anapa and on the Black Sea coast, where there was a fuel oil spill. The SME Corporation, in turn, extended guarantees and guarantees for small companies in these regions.

What decision will the Central Bank make on the key rate in March 2025

Not all cases of restructuring are problematic, according to the Central Bank. By itself, an increase in the number of applications for loan easing cannot be a factor affecting business activity, said Sergey Katyrin, head of the Russian Chamber of Commerce and Industry. This is just an indicator of the state of the economy in general and the creditworthiness of small businesses in particular, added Alexey Krylov from the Chamber of Commerce and Industry.

Nevertheless, small companies can quickly adapt to changing conditions through cost optimization, diversification of income sources and more efficient cash flow management, says Petr Shcherbachenko, associate professor at the Financial University under the Government of the Russian Federation.

Some enterprises are also considering the possibility of attracting investments or using alternative sources of financing, as well as using government support measures. Experience shows that after periods when it is difficult to repay loans, businesses still return to normal payment conditions, says Pavel Samiev from Opora Russia.

However, for the Central Bank, applications for restructuring are still an important indicator, no wonder Elvira Nabiullina dwelled on it separately. A sharp increase in requests may affect the regulator and it will not raise the key rate at the next meeting in March, experts believe.