- Information on Coronavirus
- Frequently asked questions
- 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 on closing restaurants
- 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
- Frequently asked questions
- Press releases
- Social media and webcasts
- Sign up for news
Questions and answers regarding the coronavirus and business financing
The coronavirus will have dramatic effects on business activities, initially on service companies in sectors such as tourism and catering, but over time the effects will spread to all sectors. The effects will be immediate on many sole entrepreneurs and SMEs. Companies engaged in international trade have been feeling the effects – disruptions in international value chains and logistics – for some time. Even if the most acute crisis subsides quickly, economic uncertainty is projected to continue for a longer period.
First, contact your own bank and other financing providers. Due to the exceptional situation caused by the coronavirus, banks are prepared to discuss arrangements such as loan repayment holidays and repayment rescheduling. Actions taken by the central government make banks better equipped to provide financing to companies.
According to estimates, banks continue to be well equipped to provide financing to companies. At least for the time being, the situation is different from the financial crisis that was triggered by the financial system itself. According to the Financial Supervisory Authority’s assessment, the Finnish banking sector is solvent and able to carry the risks posed by the coronavirus epidemic.
The Government has prepared an extensive package of approximately EUR 15 billion to support companies and to alleviate the negative effects of the coronavirus epidemic. In the administrative sector of the Ministry of Economic Affairs and Employment, business financing is provided by Finnvera, Business Finland, ELY Centres and Finnish Industry Investment.
The Government will make additional domestic financing of EUR 10 billion available to businesses, primarily in the form of Finnvera guarantees. Companies are advised to first contact their own bank. Business Finland’s grant authorisations will be increased by EUR 150 million to permit immediate business support measures. ELY Centres’ grant authorisations for business development projects will be increased by EUR 50 million.
Government press release on 20 March: Government proposes extensive economic measures to minimise the impact of the coronavirus epidemic
Ministry of Economic Affairs and Employment’s press release on 20 March: Government supports businesses with an extensive economic package – additional financing of EUR 10 billion made available to companies through Finnvera
The purpose of public funding is to ensure that companies will able to continue to operate profitably after the crisis. In the current situation, companies have a shortage of working capital. The state offers Finnvera guarantees to ensure banks will provide companies the financing they need. Another objective is to secure jobs and services for Finnish people.
Finnvera primarily offers guarantees; i.e. banks provide financing, and Finnvera provides the guarantee. Finnvera also grants loans.
The Government is preparing a proposal to increase Finnvera Oyj’s domestic financing authorisations to EUR 12 billion. The maximum authorisation under current law is EUR 4.2 billion, and financing in the total amount of EUR 2 billion has been granted, which means the total additional financing to companies amounts to EUR 10 billion. 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
Business Finland financing is 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 schedule, and generally seeks flexibility in all its activities. If necessary, Business Finland will extend the duration of the projects financed, extend loan periods, and expedite payments.
Business Finland’s grant authorisations will be increased by EUR 150 million to permit immediate business support measures.
On 19 March 2020, Business Finland launched two new financial services to mitigate the economic impact of the coronavirus epidemic. These services are intended for SMEs and midcaps operating in Finland whose business is suffering from the coronavirus situation.
Financial services are intended for tourism and auxiliary tourism services, creative and performing industries and all sectors where subcontracting chains are affected. The funding is intended for companies to explore and tap into new business opportunities in emergency conditions. The first funding decisions will be made on 20 March 2020.
Further information on Business Finland’s website
Finnish Industry Investment, together with other investors, is prepared to provide additional financing to private equity funds and its investee companies to cater to any needs arising from the coronavirus.
Finnish Industry Investment is also prepared to introduce a stability programme for companies that helps to strengthen the financial position of companies, together with private investors.
However, private equity investment activities only involve a limited number of Finnish businesses, compared with SMEs that are Finnvera’s customers. The services of Finnish Industry Investment supplement the state’s specialised financing provision.
Finnish Industry Investment advises companies to first contact their own bank and Finnvera.
More information on Finnish Industry Investment’s website (in Finnish).
Business services provided by the ELY Centres, i.e. business development aid, business environment development aid, regional transport subsidies and business development services, can be applied for as normally. Similarly, the granting and payment of aid and subsidies will continue as usual. ELY Centres will be flexible about changes to the content and implementation schedules of companies’ business development projects. If necessary, companies can apply for expedited payment of business development aid in several instalments.
The Government will raise ELY Centres’ grant authorisations for business development projects by EUR 50 million. The additional authorisation will be used to support SMEs particularly in the service sector but also in other sectors as necessary to mitigate the market and production disturbances caused by the coronavirus.
Business development services are provided, subject to a fee, by the ELY Centres to support the development of companies providing expert services and SMEs. These services are intended for companies that are equipped to pursue continuous profitable activities and have the will to build their business.
Business development aid is a financing product of ELY Centres, which can cater to the varying needs of SMEs, including support for investment. Business development aid may be used for an SME’s business development or renewal purposes in the event of changes in economic or market conditions, or for production reorganisation.
More information on the ELY Centre websites (in Finnish)
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.
In addition, the European Commission will shortly publish information on temporary relaxation of state aid legislation. The introduction of these measures will be considered as the situation develops. The Ministry of Economic Affairs and Employment is currently planning measures that are based on the assumed flexibility of the Commission’s state aid legislation.
The Government monitors the coronavirus situation closely and is prepared to adjust measures quickly if necessary.
The Government will facilitate freelancers and sole entrepreneurs’ access to unemployment security, regardless of the form of company. The temporary weakening of the conditions for entrepreneurial activity due to the coronavirus provides sufficient grounds for deeming the entrepreneurial activity as a secondary activity. Persons engaged in a secondary business activity are entitled to unemployment benefit. Full-time employed entrepreneurs are not required to wind down their business activities in order to be eligible for unemployment benefit.
The type of entrepreneurial activity is irrelevant, which guarantees equal treatment of entrepreneurs in emergency situations. Only the entrepreneur’s notification is required, which reduces the need for processing and decision-making based on discretion in Employment and Economic Development Offices (TE offices).
A temporary amendment to the Unemployment Security Act permitting this arrangement is being prepared by the Ministry of Economic Affairs and Employment.
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).
Financial resources of EUR 500,000 will be allocated to the Talousapu financial assistance service for entrepreneurs. In addition, a national model to help entrepreneurs facing financial and payment difficulties will be implemented.