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Digest Finance

The impact of the COVID-19 pandemic on startup finance: Considerations on the situation and aspects for the State aid

Vol. 25, Iss. 4, DECEMBER 2020

PDF  Article PDF Version

Received: 25 October 2020

Received in revised form: 12 November 2020

Accepted: 23 November 2020

Available online: 25 December 2020


JEL Classification: F65, G24, G01, G28

Pages: 430–449


Kozhanova A.V. State University of Management (SUM), Moscow, Russian Federation


Subject. The article investigates how crises influence the finance of SME and startups, and what the State does to support them.
Objectives. The article outlines lines of the governmental policy for startup finance so as to maintain the innovation-driven economy during the crisis caused by the COVID-19 pandemic.
Methods. The study is based on the critical systems analysis of economic literature (research papers, reports of consulting companies and professional experts). I also apply methods of observation, collection of facts, synthesis, etc.
Results. I outlined aspects of the governmental policy for startup finance during the COVID-19 pandemic: supporting the startups that just assumed their life cycle, the State should provide more direct finance, use special governmental funds and departments of State-owned companies, give more grants; supporting any startups notwithstanding their life cycle, the State should adopt some tax benefits in strategic sectors, simplify financing procedures in governmental funds and State-owned companies, lower interest rates on finance provided by State-owned banks.
Conclusions and Relevance. The findings can be used by governmental institutions, which deal with SME, startups and innovative economy, inter alia, to outline programs, strategies, regulatory documents.

Keywords: startup, SME, crisis, COVID-19, pandemic, budgeting


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Vol. 25, Iss. 4
December 2020