Legislative proposal regarding support for business costs to Parliament this week, applications for coronavirus-related support provided by Business Finland and ELY Centres accepted until 8 June

The Government has agreed on more detailed terms of the support for business costs. The legislative proposal is to be submitted to Parliament on 4 June 2020. Applications for coronavirus-related support provided by the ELY Centres and Business Finland will not be accepted after 16.15 on 8 June 2020.

Support for business costs is intended for companies that have experienced a significant fall in turnover due to the coronavirus and have costs that are difficult to adjust. The legislative proposal to be submitted on Thursday contains proposals for more detailed support criteria.

“The purpose of this support for business costs is to improve the liquidity of companies and to reduce the number of companies facing bankruptcy. During the preparation process, it has become clear that we need to be more specific about the eligible sectors to ensure that support is provided to companies in difficulties due to the coronavirus. Business subsidies made available so far have been designed to provide tools for business development during the crisis, but now the time has come to discontinue that form of support. By supporting companies we are supporting employment in Finland,” says Minister of Economic Affairs Mika Lintilä.

Business cost support conditional to falling sales in the sector and in the company

To be eligible to support for business costs, a significant decrease in both the company’s and the sector’s turnover is required. Matters addressed in the legislative proposal include:

• To be eligible to support for business costs, a turnover decrease of at least 10% in the company’s sector from a comparison period is required. If a company is engaged in such an industry, another requirement is that the company’s own turnover has decreased by at least 30% from a comparison period.
• Sectors eligible for support would be defined separately in a Government Decree in June. The decrease in turnover would be verified with VAT declarations submitted to the Tax Administration.
• The sector’s turnover in April 2020 and company turnover in April – May 2020 would be compared with the average turnover in April – June 2019.
• Support would be granted on the basis of the company's fixed costs and payroll costs. The maximum amount of support in euros payable for two months is still under consideration. Support under the amount of EUR 2,000 would not be paid.
• Companies that have been granted other coronavirus-related financial support would be entitled to apply, but other forms of direct support would 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 would be deducted in full, and 70% of the support for business development granted by Business Finland and the ELY Centres would be taken into account.
• The State Treasury could, on particularly serious grounds demonstrated by a company having to do with the coronavirus pandemic, also consider the company’s application in a situation where the sectoral conditions described above are met and would otherwise make the company ineligible for support. The purpose of the provision is to take into account situations in which the Act, as a rule, excludes certain sectors, but a  company engaged in that sector suffers from financial problems caused by the coronavirus pandemic. The Act would apply to such a company in other respects.

The legislative proposal will be published on Thursday, when the Government will submit it to Parliament for consideration. Companies can submit electronic applications for support for business costs to the State Treasury once the Act is in force.

Applications for support granted by Business Finland and ELY Centres accepted until 8 June

Following the introduction of the new form of support, the business development aid currently granted by Business Finland and the ELY Centres to companies in the context of the coronavirus epidemic will be discontinued. However, Business Finland and ELY Centres will process all applications submitted by 16.15 on 8 June 2020. After this, the standard financial instruments offered by Business Finland and ELY Centres will continue to be available. Applications for coronavirus-related support granted by ELY Centres to rural enterprises, primary production and fisheries will continue to be accepted.

The impact of the coronavirus on the operating environment of companies will be actively monitored. The Ministry of Economic Affairs and Employment is prepared to reopen the support provided by ELY Centres and Business Finland if the Government so decides later.

Support for sole entrepreneurs is available from municipalities. No changes will be made to support for sole entrepreneurs and self-employed persons in the coronavirus crisis.

The Government announced its intentions to introduce a new form of support to businesses on 14 May 2020.

Inquiries:

Jenny Hasu, Special Adviser to the Minister of Economic Affairs, Ministry of Economic Affairs and Employment, tel. +358 29 504 7213
Ilona Lundström, Director General, Ministry of Economic Affairs and Employment, tel. +358 29 504 7186
Mikko Huuskonen, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3732 (support for business costs)
Mikko Ojala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3506 (support from ELY Centres)
Sampsa Nissinen, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 7189 (support from Business Finland)
Timo Laitinen, Director-General, State Treasury, tel. +358 295 50 2200