Can new companies receive business cost support?

New companies were excluded from aid in the previous application rounds because they were not able to demonstrate a change in turnover between the coronavirus period and a reference period in the past. In the third application round for business cost support, companies that fall within the specific sectors defined by the Government Decree, and that were established on or after 1 January 2020, would be eligible for aid on the basis of changes in the average turnover of the sector. However, such companies would not be eligible for discretionary aid because they cannot demonstrate a change in their turnover. The Government decree will define the sectors where turnover has decreased by at least 10% and which have therefore been clearly affected by the pandemic. It is to be expected that a company established in one of these sectors during 2020 would have faced specific challenges to start its operations due to the pandemic. It is more likely that a company operating in one of the sectors defined by the decree would have experienced a fall in turnover, as required by the Act, than a company operating in a sector not covered by the decree.

What an entrepreneur should do if they experience problems because of the coronavirus?

First, contact your own bank and other financing providers. The banks have 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. More information: Coronavirus: Guidance for businesses

What type of assistance does Finnvera provide to companies in financial difficulties due to the coronavirus?

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

What type of assistance does Business Finland provide to companies in financial difficulties due to the coronavirus?

Business Finland has introduced a new research, development and innovation loan (RDI loan). 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 also to encourage companies to explore opportunities for providing new jobs in Finland after the crisis is over. More information on Business Finland’s website

What type of assistance does the Finnish Industry Investment Ltd Tesi provide to companies in financial difficulties due to the coronavirus?

Tesi’s funding programme Tesi (Finnish Industry Investment Ltd) is a state-owned investment company specialising in the venture capital and private equity market. It is launching a funding programme to ensure that medium-sized companies that have run into temporary difficulties due to the coronavirus epidemic will be able to stay in business. Dealing with medium-sized companies, the programme will focus on businesses that are highly important in Finland in terms of their employment impact and turnover (turnover of at least EUR 10 million, more than 50 employees, profitable business operations before the crisis and potential for this in the future too). 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 but require 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. Applications for this stabilisation funding will be taken on the Tesi website from Tuesday 14 April 2020. At the same time Tesi will also publish further details about the programme and the funding application process. More information on Tesi website Tesi’s Venture Bridge programme Through its Venture Bridge programme, Finnish Industry Investment (Tesi) invests 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 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. More information on Tesi website

What type of support will be given to sole entrepreneurs and freelancers?

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 2020–31 December 2020. More information: Questions and answers on entrepreneurs’ right to unemployment security Coronavirus: Guidance for businesses

Where can entrepreneurs turn to for advice?

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

Questions and answers regarding the coronavirus and business financing

Questions and answers on the Government’s proposal for business costs support

New companies were excluded from aid in the previous application rounds because they were not able to demonstrate a change in turnover between the coronavirus period and a reference period in the past. In the third application round for business cost support, companies that fall within the specific sectors defined by the Government Decree, and that were established on or after 1 January 2020, would be eligible for aid on the basis of changes in the average turnover of the sector. However, such companies would not be eligible for discretionary aid because they cannot demonstrate a change in their turnover.

The Government decree will define the sectors where turnover has decreased by at least 10% and which have therefore been clearly affected by the pandemic. It is to be expected that a company established in one of these sectors during 2020 would have faced specific challenges to start its operations due to the pandemic. It is more likely that a company operating in one of the sectors defined by the decree would have experienced a fall in turnover, as required by the Act, than a company operating in a sector not covered by the decree.

Ministry of Economic Affairs and Employment