Government increases business financing due to COVID-19 and provides EUR 1 billion in direct subsidies
The Government is allocating EUR 1 billion for direct business subsidies. Of this amount, EUR 700 million is intended for grants provided by Business Finland and EUR 300 million for grants provided by centres for economic development, transport and the environment.
The subsidies are included in the Government's supplementary budget for 2020, which was adopted by Parliament on 26 March 2020. The supplementary budget will become effective on 31 March 2020.
“Our aim is that as many businesses as possible can continue to operate profitably during and after the crisis. In addition to direct subsidies, the state will guarantee bank loans to companies,” says Minister of Economic Affairs Mika Lintilä.
Grants from centres for economic development, transport and the environment to target small enterprises with 1–5 employees
Centres for economic development, transport and the environment will support small enterprises that have suffered from market and production disturbances caused by the coronavirus outbreak across the country. The centres will provide financing for companies that employ 1–5 people.
Financing can be made available for small enterprises in all sectors, with the exception of agriculture, fisheries and forestry and the processing of agricultural products.
Centres for economic development, transport and the environment will publish more information on financing on their website on Friday 27 March 2020.
Business Finland grants intended for SMEs and midcaps
Business Finland has launched two new financial services owing to the coronavirus outbreak. They are 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.
Financial services are provided for the following sectors: tourism and auxiliary tourism services, creative and performing industries and all sectors where subcontracting chains have been or will be affected by the coronavirus outbreak. With this financing, businesses can identify, plan and implement new development measures to prevent and remedy market and production chain disturbances caused by the COVID-19 epidemic.
By 25 March 2020, Business Finland had received more than 9,000 financing applications from companies.
State-owned specialised financing company Finnvera to guarantee business loans
In addition to direct business subsidies, the state will guarantee bank loans to companies. On 20 March 2020, the Government announced that it would enable additional financing of EUR 10 billion to businesses, mainly through Finnvera's guarantees.
Companies must first contact their own bank, which can then grant the financing guaranteed by Finnvera. Finnvera's guarantee can cover up to 80 per cent of the bank loan. If the capital of the guaranteed loan is no more than EUR 1 million, Finvera is prepared to fast-track the application processing and decision-making. The previous limit for fast-tracked processing has been EUR 150,000. The government proposal on the amendments is to be submitted to Parliament in April.
Enterprise Finland’s Talousapu financial assistance service offers advice to companies facing payment difficulties. Talousapu also provides guidance on how to deal with issues which the coronavirus outbreak has caused for companies. The national telephone number of the Talousapu financial assistance service is +358 29 502 4880, opening hours Monday to Friday 9.00–16.00.
Mika Niemelä, Director of Finance, Ministry of Economic Affairs and Employment, tel. +358 (0)29 506 2135
Petri Peltonen, Under-Secretary of State, Ministry of Economic Affairs and Employment, tel. +358 29 506 3662