The situation of small and medium-sized enterprises (SMEs) in the Russian Federation during the COVID-19 pandemic and the resulting restrictive measures introduced by  the state are analyzed in  the context of  the long-term dynamics of  the sector and changes in public policy towards SMEs over the last two decades. Based on the analysis of official statistics and business demographics in 2005–2020, it is revealed that unfavorable trend – first of all, a decline in business start ups and an increase in firms’ shutdowns – in the sector had developed already before the crisis of 2008 and further it continued to  progress. The main factors for such negative dynamics have been analyzed by the authors both in Russia as a whole and in different groups of regions. The study shows that negative developments of the SME in the country should be understood in the context of negative socio-economic changes influenced by a series of established institutional traps which occurred during the systemic transition and the limited effectiveness of the measures applied to support SMEs.
An analysis of the feasibility and efficiency of the urgent state support measures of small business under the CIVID-19 has been carried out. In conclusion, the authors draw practical recommendations on the principles of reloading the public policy toward SME which should be formed in future after the pandemic, as well as indicate possible junctions in their implementation.