High borrowing costs from foreign lenders remain a key constraint on investment by Ukrainian businesses, particularly for companies seeking to expand production or modernise existing facilities, according to the Verkhovna Rada's Finance Committee, reported Ukraine Business News.

Access to external financing continues to play an important role in determining whether companies can invest in new production capacity, as domestic businesses operate under prolonged economic and security pressures.

In the second quarter of 2026, fixed-rate long-term loans were issued at rates ranging from 1% to 10% in US dollars and from 0.1% to 10% in euros. The most significant improvement was recorded in euro-denominated financing.

During the quarter, 64% of long-term euro loan agreements were concluded in the lowest interest-rate range. The share of the most expensive euro loans also declined substantially over the year, falling to 9% from 22%.

The picture for dollar financing was less clear. Most agreements, or 57%, remained in the medium interest-rate range. At the same time, the shares of both the cheapest and most expensive dollar loans increased, indicating a more uneven distribution of borrowing costs.

Despite the improvement in euro financing, low-cost loans remain the exception rather than the rule. Even a maximum rate of 10% represents a significant cost of capital for companies planning large-scale investments in new factories, equipment or production upgrades.

Higher financing costs can directly affect corporate investment decisions. Businesses may postpone expansion projects, reduce planned capital expenditure or seek alternative sources of funding, including support from international financial institutions.