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- Questions and answers regarding the coronavirus and business financing
- Questions and answers: Impact of the COVID-19 coronavirus outbreak on consumers
- Questions and aswers: Corona and worker mobility
- Questions and answers regarding the coronavirus and working life
- Questions and answers: Coronavirus and obligation to work in the healthcare sector
- Questions and answers: Coronavirus and seasonal work
- Questions and answers on entrepreneurs’ right to social security
- Questions and answers on support available to sole entrepreneurs
- Questions and answers on security of supply
- Questions and answers on support and compensation for the food and beverage sector
- Questions and answers: Coronavirus and travel to Finland
- Coronavirus: Guidance for businesses
- International reports on the effects of the coronavirus
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Questions and answers regarding the coronavirus and business financing
Questions and answers on the Government’s proposal for business costs support
First, contact your own bank and other financing providers. The banks have already announced they are ready to look at loan repayment holidays and payment rescheduling due to the exceptional situation caused by the coronavirus epidemic. The Government is also taking action to improve the ability of banks to provide business financing. Finnvera guarantees loans that banks give to companies. Support is also available from the central government by application. Depending on the size of the company, the support is granted by municipalities, ELY Centres and Business Finland.
Inquiries and customer service
Finnvera primarily offers guarantees; i.e. banks provide financing, and Finnvera provides the guarantee. Finnvera also grants loans.
The Government enables the provision of additional financing of EUR 10 billion to businesses through Finnvera by increasing its maximum domestic financing. In addition, the state will increase its coverage of Finnvera’s credit and guarantee losses from 50% to 80%, enabling Finnvera to take bigger risks in the current conditions of economic uncertainty.
Finnvera will also extend the use of SME guarantee and start guarantee for purposes such as financing required to address the financial challenges caused by the coronavirus. Guarantee decisions on loans of less than one million euros granted by banks can be made quickly. This affects a very large number of loan decisions and thereby helps to make loan decisions quickly available to a significant number of companies. Guarantee decisions for loans larger than one million euros require an assessment process at Finnvera, which is why the decision-making takes longer.
Companies are advised to first contact their bank regarding flexible repayment and other arrangements involving financing already provided. Finnvera may grant a guarantee, if needed.
More information on Finnvera’s website
Inquiries and customer service
The Government will increase Business Finland’s grant authorisations by EUR 980 million to enable business support measures in the coronavirus situation. The application period for Business Finland’s business development grants ended on 8 June at 16.15.
The direct aid that Business Finland granted due to the coronavirus situation was intended for SMEs in Finland that employ 6–250 people and for midcaps that may employ more than 250 people but have an annual turnover of less than EUR 300 million.
With this funding, businesses could identify, plan and implement new development measures to deal with the effects of the coronavirus epidemic and address any further disruption.
Business Finland will introduce a new research, development and innovation loan (RDI loan), for which the Government has reserved EUR 300 million. This will be available to limited companies of all sizes (limited liability companies and public limited companies) and in all sectors.
The loan is intended for all companies operating in labour-intensive sectors in Finland that are suffering from business disruptions caused by the coronavirus crisis. The purpose of this loan finance is to help companies keep their employees in work during the crisis and to encourage companies to explore opportunities for providing new jobs in Finland after the crisis is over.
In addition, other forms of financing offered by Business Finland are available by application as normally. Financing will be also be granted and paid out as normally. Business Finland is very flexible about any changes in project schedules and loan repayment schedules, and generally seeks flexibility in all its activities. If necessary, Business Finland can extend the duration of funded projects and loan periods, and make payments more quickly.
Inquiries and customer service
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. 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 million and EUR 10 million. The Tesi programme covers limited liability companies and public limited companies.
The aim is to prevent viable businesses going bankrupt as a consequence of a highly exceptional crisis that has had nothing to do with their operations. Tesi’s stabilisation programme will invest in businesses that are in a good position to overcome the financial difficulties caused by the coronavirus epidemic with additional funding. This programme to deal with the liquidity problems faced by businesses complements the follow-on funding that Tesi announced earlier.
Investments to be made from this temporary programme offer a faster track to helping businesses cope with their liquidity crisis.
Through its Venture Bridge programme, Tesi will also invest in technology companies looking for international growth that have previously raised at least seed financing from professional venture capital investors and that have had to postpone their next external financing round due to the coronavirus situation. Tesi will make the investments together and on equal terms with professional venture capital investors. The investments are made as convertible loans, which will be converted to equity in the next investment round. In this manner, the investments can be made quicker than in equity investments. Tesi’s Venture Bridge investments will be EUR 0.25–2 million in size and private investors will invest at least the same amount of capital in the company. The Venture Bridge programme will start on 17 June 2020. Tesi will publish more detailed information about the programme on its website by then.
The Venture Bridge programme will supplement Tesi’s direct venture capital investments and will temporarily expand Tesi’s investment focus to early-stage venture capital financing. In addition to the Venture Bridge programme, Tesi will increase its investment volume for larger, later-stage venture capital financing rounds by, for example, utilising EFSI, its joint investment programme with the European Investment Bank.
The Government has reserved EUR 400 million for Tesi’s measures.
More information on Finnish Industry Investment’s website:
It is important that we make effective use of the EU level measures in Finland. For instance, the European Investment Bank Group is expected to redirect its programmes.
On 19 March 2020, the European Commission issued a communication on its Temporary Framework which considerably relaxed the EU State aid rules to enable Member States to effectively respond to the exceptional economic difficulties caused by the COVID-19 outbreak. This will facilitate the granting of a comprehensive package proposed by the Finnish Government on 20 March 2020 to companies facing financial difficulties due to the COVID-19 outbreak.
Under the Communication, aid may be granted to companies that are facing difficulties due to the emergency conditions caused by the coronavirus. Meanwhile, aid will not be granted to companies that were in financial difficulties on or before 31 December 2019. All support measures referred to in the Communication require a notification of State aid to the Commission, and their introduction requires prior approval by the Commission.
On 20 April 2020, the European Commission approved an aid scheme under which Finnvera can grant guarantees and loans for working capital and for investments to companies facing financial difficulties as a result of the crisis caused by the coronavirus epidemic. This is the first State aid decision taken by the Commission concerning Finland’s actions in the coronavirus situation. The decision is based on the Commission communication of 19 March 2020.
Press release of the Ministry of Economic Affairs and Employment 20 March 2020: Temporary flexibility in EU State aid rules to mitigate difficulties caused by the COVID-19 outbreak
Press release of the Ministry of Economic Affairs and Employment 6 April 2020: More flexibilities to the EU State aid rules due to the coronavirus situation
Press release of the Ministry of Economic Affairs and Employment 21 April 2020: Commission approves the first Finnish aid scheme to support companies in the coronavirus outbreak
Entrepreneurs are temporarily entitled to labour market support to deal with the sudden and unforeseen decline in demand due to the coronavirus epidemic. This solution applies to all entrepreneurs regardless of the type of business. Labour market support may be paid for the period 16 March 2020–30 June 2020.
As a sole entrepreneur or self-employed person without employees (‘yksinyrittäjä’), you can apply for municipal financial support during the coronavirus crisis. To apply for this support, you must be a sole entrepreneur or self-employed person without employees who is engaged full-time in Finland in some form of economic activity, regardless of its legally defined format or its source of financing. In other words, the support covers all types of companies.
Sole entrepreneurs can apply for support from the municipality in which their business is registered, i.e. the business domicile registered in the Business Information System. Each municipality organises the application either by electronic means or on paper forms. Municipalities will help entrepreneurs with the application procedures and process applications in the order of arrival.
The support available to sole entrepreneurs is a lump-sum payment of EUR 2,000, which is intended to cover costs arising from the entrepreneur’s business activities. These include, for example, the costs of premises and equipment purchased for business purposes, as well as accounting and office expenses. Eligible costs are those incurred between 16 March and 31 August 2020.
This category of sole self-employed also includes those who are under the Finnish categories of ‘yrittäjä’ and ‘ammatinharjoittaja’ (both ‘self-employed’) who have no employees on their payroll, and also freelancers (no employees).
Enterprise Finland’s Talousapu financial assistance service offers advice to companies facing payment difficulties. The telephone number of the service is +358 2950 24880 (weekdays 9.00–16.00).
In addition, advice to companies is also available from:
- Suomen Yrittäjät
- TE Offices
- Finland Chamber of Commerce
- Yrityskummit (Business Mentors)
- Business advisers of Finnish Enterprise Agencies and development companies