Government supports businesses in coronavirus situation – new funding programme for medium-sized enterprises
The Government is taking various measures to ensure that businesses will be able to continue operating on a profitable basis after the coronavirus crisis is over. Both direct business subsidies and guarantees for loans are made available to businesses. As the most recent measure, on 14 April 2020 the Finnish Industry Investment Ltd Tesi will launch a new funding programme for medium-sized enterprises. The State allocates EUR 150 million for this programme.
On Friday 3 April 2020, the Government reviewed the coronavirus situation with the main focus on supporting businesses.
“The State has reacted quickly to the situation caused by the coronavirus epidemic by increasing Finnvera’s authorisations and funding for businesses in the form of subsidies in the first supplementary budget for 2020. The banks have also increased their funding but, on top of these measures, capital investments are also needed. The new programme introduced by the Finnish Industry Investment responds to this need,” Minister of Economic Affairs Mika Lintilä says.
New programme invests in businesses in difficulties due to the coronavirus
The Finnish Industry Investment Ltd Tesi will launch a funding programme to ensure that medium-sized enterprises that have run into temporary difficulties due to the coronavirus epidemic will be able to stay in business. The aim is to prevent bankruptcies among viable businesses as a result of the highly exceptional crisis that had nothing to do with their operations.
In the stability programme, investments will be made in businesses that have the potential to overcome the financial problems caused by the coronavirus epidemic through additional funding. This further action by the Finnish Industry Investment Ltd to solve the liquidity problems faced by businesses complements the follow-on funding it has published earlier.
Investments to be made in this temporary programme offer a faster track to helping businesses in coping with their liquidity crisis. In the programme, the Finnish Industry Investment Ltd provides funding to medium-sized enterprises, which are highly important in Finland in terms of their employment effect and turnover (turnover at least EUR 10 million, more than 50 employees, profitable business operations before the crisis and potential for this also in future). The investments will vary between EUR 1 and 10 million.
The application for this stability funding will be opened on the Finnish Industry Investment website on 14 April 2020. At that time, the Finnish Industry Investment will also publish further details on the programme and on the application for funding.
EUR 1 billion for direct business subsidies, Finnvera guarantees business loans
Municipalities, Centres for Economic Development, Transport and the Environment and Business Finland grant direct business subsidies to enterprises if their business has run into difficulties due to the coronavirus situation. The Government decided on this support earlier as part of the supplementary budget for 2020.
A self-employed person without employees can apply to municipalities for financial support. The amount of funding reserved for this is EUR 100 million. Centres for Economic Development, Transport and the Environment support small enterprises that have suffered from market and production disturbances caused by the coronavirus epidemic. The amount of funding reserved for this is EUR 200 million.
Business Finland targets funding to SMEs and mid-cap companies whose business is suffering from market and production chain disturbances caused by the coronavirus situation. The amount of funding reserved for this is EUR 700 million.
State-owned specialised financing company Finnvera grants guarantees to new business loans. Through the guarantees granted by Finnvera, the Government will enable the provision of EUR 10 billion in additional funding for businesses.
Entrepreneurs entitled to unemployment security, more flexibility to lay-offs
The Government proposes that, as a temporary measure, entrepreneurs would also be entitled to labour market support on the grounds of sudden and unforeseen decline in the demand due to the coronavirus epidemic. The aim is to ensure the livelihood of entrepreneurs.
The Government submitted the proposal to Parliament on 2 April 2020. The act should enter into force as soon as possible. After this, entrepreneurs who did not use to be entitled to labour market support may now apply for it. Entrepreneurs may register as jobseekers with the Employment and Economic Development Office even before the act enters into force.
Businesses are also supported in adapting their operations by temporarily shortening the notification period for lay-offs and the duration of co-operation negotiations. The legislative amendments are in force from 1 April to 30 June 2020. The employer is required to inform the employee of the lay-off no later than five days before the lay-off begins. The earlier time limit was 14 days. The duration of co-operation negotiations regarding lay-offs will be shortened from the current six weeks or 14 days to five days. In addition, employers have the right to lay off an employee in a fixed-term employment relationship under the same conditions as an employee with an employment contract of unspecified duration.
Jenny Hasu, Special Adviser to the Minister of Economic Affairs and Employment, Ministry of Economic Affairs and Employment, tel. +358 29 504 7213
Petri Peltonen, State Under-Secretary, Ministry of Economic Affairs and Employment, tel. +358 29 506 3662
Ilona Lundström, Director General, Ministry of Economic Affairs and Employment, tel. +358 29 506 3662
Eeva Vartio, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7082 (entrepreneurs and unemployment security)
Tarja Kröger, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 8937 (labour legislation)