This study analyses the impact of access to debt finance on Russian firms’ productivity growth and exit patterns. Using survey data (BEEPS V) we investigate the relationship between bank loans, innovation and firms’ performance. We find that innovation activity per se does not lead to Russian firms’ stronger productivity growth and does not reduce the risk of exit in the period of unstable economic situation in 2013-2015. Inverse-probability-weighted regression-adjustment (IPWRA) estimators show that long-term bank loans help firms improve productivity but only if they engage in innovation activity. The positive effect of debt finance on the likelihood of staying in the market comes from the group of large enterprises which are not involved in innovation activities. It could be a sign of an ineffective reallocation of financial resources towards large enterprises not necessarily showing higher productivity growth rates. At the same time, firms engaging in more sophisticated innovation stay on the market longer if they manage to obtain longterm loans.