In market conditions, small business is very actively developing. State support for small businesses is of particular practical importance in this regard. Firstly, its representatives participate in the formation of budget items at all levels. Enterprises create jobs for citizens, invest their profits in high-tech and knowledge-intensive production, and increase the investment attractiveness of the state. Let us further consider the features of the state support system for small businesses.
Relevance of the issue
Entrepreneurial is the activity carried out by an economic entity independently for the purpose of regular profit-making in the course of using various production resources for the sale of products, the provision of services, and the performance of work under the law.
If you analyze the statistics, you can identify the most promising areas of economic development, indicators of enterprise performance.
The essence of the developed state programs to support medium and small businesses is mainly not in direct subsidies to organizations, but in the creation of favorable conditions for their effective work, and providing access to borrowed funds. The state is interested in stimulating entrepreneurial activity, as this will ensure the development of the entire national economic complex as a whole.
Transition to a Market Economy
In the process of transition to a market economy, various difficulties arose that required prompt elimination. First of all, the state faced the problem of distribution of property. It was necessary to establish and consolidate the law of private property, determine the owners of enterprises, the procedure, cost and conditions of transfer of ownership. It was necessary to form financial markets, currency, banking, and credit systems. Accordingly, we needed effective planning and accounting schemes for assessing the value of enterprises and an objective analysis of their work.
All laws in force before the transition should be reviewed to legalize new types of economic relations, property, types of transactions. Based on the data obtained, it was supposed to develop various forms of state support for small businesses.
To achieve these goals, qualified specialists were needed. It was necessary to train managers who would be able to work in the new conditions, would be competitive in the Russian Federation and abroad. Moreover, it was necessary to develop a new state policy on competition issues, to find ways to eliminate the problem that arose during privatization. The fact is that the transfer to private hands of large, but inefficient enterprises led to the emergence of the same gigantic but illiquid monopolies.
At the transitional stage, it was necessary to determine the procedure for terminating state subsidies for various industries, to develop fiscal systems that provide funding for the government.
In addition, the state needed to resolve issues related to uncompetitive companies and the creation of social support services for unemployed people.
Shadow economy
Specialists who analyze the financial turnover in the country say that about 40% of all profits are in the shade. This means that the budget does not receive taxes and fees from these funds. Despite the gradual decrease in the share of shadow wages, its share is still large. This situation is associated with:
- High tax rates that impede the capitalization of enterprises.
- Distrust of the authorities, uncertainty about the stability of the socio-economic situation.
- Fear of criminal structures.
The problems of modern business
Some experts identify difficulties in terms of their importance. The key problems of small and medium enterprises are:
- High tax rates.
- Inaccessibility of loans.
- Administrative barriers.
As you can see, the second place is the inaccessibility of borrowed funds. According to research results, annually no more than 15 thousand entrepreneurs have free access to finance. This suggests that organizations providing financial and credit services cover only 1% of the market.
Help from the authorities
The situation of entrepreneurs is unlikely to change without state support. Small businesses are in need of borrowed funds. Finances are necessary for the formation and expansion of the production base.
Any government program to support small businesses will be effective only if the interests of the authorities and entrepreneurs coincide. Help should be aimed at supporting the self-development of enterprises, weakening or eliminating barriers.
State support for small and medium-sized businesses is based on the provisions of the law. Power forms the necessary infrastructure for enterprises, creates organizations and institutions that provide the services necessary for the implementation of business projects. In addition, state support for medium and small businesses consists in the development and expansion of consulting firms, the training of qualified management personnel.
The role of the government as a participant in civil turnover is of great importance. The state is able to slow down the development of enterprises under adverse working conditions. At the same time, power can stimulate their activity. Then we can talk about such types of state support for the development of small businesses, such as providing benefits, placing government orders. In such cases, the government acts as an accelerator of enterprises, ensuring the involvement of new economic entities.
Equally important is the state financial support for small businesses. It is expressed in the provision of subsidies to promising enterprises, investment in innovative technologies and production, and the provision of loans at reduced rates.
State support measures for small businesses
It should be noted that the authorities are constantly analyzing the situation in the economic sphere. Based on the monitoring results, plans for the prospective development of industries are drawn up, and government programs to support small businesses are developed. Moreover, they are used to develop specific measures on the ground - in the regions and municipalities, taking into account the specifics of the territory. All these measures are fixed by normative acts adopted by the authorities.
Activities that are implemented as part of state support for small business in Russia are aimed at:
- Infrastructure development. At the federal, regional, municipal levels, objects are being created that ensure the uninterrupted and efficient operation of enterprises (catering organizations, service companies, etc.).
- Attracting socially unprotected categories of citizens to work. The enterprises have quotas for the employment of disabled people (in accordance with testimonies), youth, people who have been laid off after long service, refugees, unemployed, internally displaced persons, citizens who have served criminal sentences.
- Stimulating innovation. State support for small business is expressed in ensuring the implementation of the results of educational and experimental, scientific and technical projects.
- Providing entrepreneurs with empty and unfinished facilities. A separate area of state support for small businesses is the creation of conditions for the priority purchase of rented premises, taking into account already invested funds.
Features of financing
State support for small businesses is mainly funded by the federal budget. However, receipts from other sources are also possible. The situation is similar with the implementation of programs at the regional and local levels.
The amount of funds allocated annually for state support of small businesses is reflected in a separate line in the budget expenditures as advised by the government.
Enterprises and organizations of various forms of ownership are entitled to independently develop and implement business development projects, form funds, and make proposals to executive structures on the introduction of these projects into regional or state programs.
Compensation for lost revenue
This is a special area in enterprise support programs. Compensation for lost profits is carried out by credit organizations. Compensation may be made in part or in full. Compensation claims are included in the agreement between the support funds and credit institutions.
In addition, regulatory acts provide for insurance companies to cover losses incurred in income insurance. As in the previous case, the claim for compensation is enshrined in the agreement.
Government orders
They are of particular importance to entrepreneurs. Various enterprises are involved in fulfilling government orders. Currently, there are preferential conditions for the participation of small and medium-sized businesses in public procurement. At the same time, government agencies and enterprises must place at least 15% of orders for entrepreneurs.
Key support mechanisms
Currently, there are many different ways to help entrepreneurs. The main support mechanisms can be considered:
- Regulatory Regulation The key act regulating the activities of representatives of medium and small businesses is considered Federal Law No. 209. In this law, the key role is given to the implementation of regional programs for the development of small and medium enterprises.
- Financial support. It is carried out in accordance with the provisions of a government decree, fixing the conditions and procedure for the provision of budget funds.
- Property assistance. It is provided by bodies of state power and territorial self-government. Such assistance is expressed in transferring for use / ownership of plots, structures, buildings, non-residential objects, vehicles, equipment, tools, inventory for a fee, free of charge or on preferential terms.
Tax relief
One of the areas of support for medium and small enterprises is preferential taxation. Since 2015, the federal law has been in force in the Russian Federation, which provides for the first registered enterprises not to pay taxes during the first 2 years of work, choosing a patent or simplified system. However, it is worth saying that these rules do not apply to production, scientific and social enterprises.
An economic entity may be deprived of the right to exemption from taxation if its staff exceeds the amount established by law.
Subsidies
For medium and small enterprises, the following types of subsidies are provided for:
- payment of an initial contribution upon conclusion of a leasing (rental) agreement;
- payment of interest on loans;
- reimbursement of expenses for improving the energy efficiency of the enterprise;
- acquisition of fixed assets and intangible assets;
- development of innovation.
Today, one of the major participants in financial business support programs is OJSC “SME Bank”. The key task of this organization is to ensure unhindered, equal access for all participants in the turnover, including those located in territories with difficult socio-economic conditions, to borrowed funds. In addition, the bank is constantly working to improve methods and forms of assistance to entrepreneurs through partner credit institutions.
Warranty Organization System
It was formed in 2015. The credit guarantee agency is considered the core of the system. This is a non-banking organization, created on the basis of Government decree No. 740-r of 2014.
Its authorized capital is 50 billion rubles. The Russian Federation through the Federal Property Management Agency acts as the sole founder. The shareholder's powers are exercised by the Ministry of Economic Development.
The "Agency" operates to provide the so-called counter-guarantees and acts as a guarantor in conjunction with regional organizations in lending to projects of enterprises operating in the non-commercial sphere, worth from 50 million to 1 billion rubles. This allows you to use the financial resources of the constituent entities of the Russian Federation, increase the amount of borrowed funds allocated to small and medium-sized businesses.
In the course of joint activities, uniform conditions and standards for the operation of regional guarantee structures are developed, and opportunities for providing guarantees are expanded. Providing methodological assistance in the implementation of enterprise support programs is also of no small importance in the framework of cooperation.
Conclusion
The development of small business will solve many problems, including in the social sphere. Thus, assistance to enterprises will provide an increase in the quality and volume of production, attracting the working-age population and, accordingly, reducing unemployment, stimulating competition, and introducing innovative projects.
Medium and small businesses are in great need of state support. The expansion, modernization, and development of enterprises will have a beneficial effect on the state of the economy. State participation in the work of entrepreneurs will allow them to enter international markets. And this, in turn, will increase the prestige of the country.
An increase in production volume at enterprises will lead to an increase in GDP and the size of tax revenues.
Medium and small businesses have taken a huge step forward. Currently, the services, catering, and construction sectors are considered especially developed.
Small businesses today face different challenges. One of the most relevant is the insufficiency of the resource base (both financial, and material and technical). Actually, at present we are talking about the formation of a new sector of the national economy. For many years he was absent from Russia. Accordingly, at the time of transition to market conditions, there were no trained entrepreneurs in the country. In this regard, many have lost their business.
Today, the state pays great attention to the development of medium and small enterprises, and we can talk about the results of the implementation of a number of programs. Of course, far from all the problems have been solved; a lot of work remains to be done. But the fact that the state does not leave entrepreneurs and provides assistance to them is evidence of favorable trends. Representatives of business regularly meet with members of the government, the president. At these meetings urgent problems are discussed, and ways out of difficult situations. The main thing is not to stop there and continue to work.