Government to introduce a new form of support to businesses to cover costs
In negotiations held on 13 May 2020, the Government decided to introduce a new form of support to businesses in all industries to cover their costs. The support is intended for companies that have experienced a marked decrease in turnover due to the coronavirus epidemic, and have costs that are difficult to adjust. Support is allocated to companies and sectors most severely affected by the coronavirus.
“With this new support for business costs we aim to prevent a wave of bankruptcies and job losses. We want to help companies get back on their feet after the coronavirus crisis and avoid layoffs turning into redundancies. So far, direct support has mainly consisted of support for business development. What we need now is support for covering business costs that would be available to businesses in all sectors. This short-term arrangement helps to keep businesses going,” says Minister of Economic Affairs Mika Lintilä.
“An act on support for business costs is being prepared by the Ministry of Economic Affairs and Employment and the Minister of Finance as a matter of urgency. State Treasury is the organisation granting this support, which makes the application process faster,” explains Minister of Finance Katri Kulmuni.
Eligibility criteria include decrease in turnover, other requirements to be detailed during the preparation of the act
The exact turnover decrease required to be eligible for support will be determined during further preparations. The support is intended to help cover the company’s fixed costs and salary costs that are difficult to adjust. The levels of compensation will be determined as the preparations proceed.
The amount of support to be granted will be determined later. Support may be granted for a period of two months. The act on support for business costs is to enter into force as soon as possible.
Companies will be required to submit an electronic support application to State Treasury. State Treasury will provide more details of the application process as soon as possible.
Companies that have been granted other coronavirus-related financial support are entitled to apply, but other forms of direct support will be deducted from the support for business costs. Support for the food and beverage service sector and COVID-19 support for sole entrepreneurs and self-employed people will be deducted in full, and 70% of the support for business development granted by Business Finland and the ELY Centres will be taken into account.
The support for business costs will affect the company’s distributable funds for 2020. Associations and foundations engaged in business activities are also eligible for support. However, support for business costs is not available to companies covered by coronavirus-related equity funding provided by the Finnish Industry Investment Tesi, or banking and insurance companies.
Support provided by ELY Centres and Business Finland during coronavirus to be gradually discontinued
At the moment, ELY Centres and Business Finland grant companies support for business development during the coronavirus epidemic. The Government decided that applications for this form of support would no longer be accepted after the Government has submitted its proposal on support for business costs.
Business Finland and ELY Centres will process all applications submitted during the application period for coronavirus-related support. After the application period closes, the standard financial instruments offered by Business Finland and ELY Centres will continue to be available.
“The support provided by Business Finland and ELY Centres have proven necessary. Finland needs new business and growth to survive the coronavirus crisis. I am very pleased to see that companies strive to develop new business during the crisis. But now that a new form of support is available for costs and immediate needs, it is justified to end the provision of other financing,” says Minister of Economic Affairs Lintilä.
Support for sole entrepreneurs and self-employed people during coronavirus is available from municipalities. No changes will be made to this support.
Jenny Hasu, Special Adviser to the Minister of Economic Affairs, tel. +358 29 504 7213
Antti Siika-aho, Special Adviser to the Minister of Economic Affairs, tel. +358 29 504 7228 (requests for interview with the Minister)
Ilona Lundström, Director General, Ministry of Economic Affairs and Employment, tel. +358 29 504 7186
Juha Sarkio, Director General, Ministry of Finance, tel. +358 29 553 0031