Financial aid programs for companies: 7 ways to survive the crisis

[fa icon="calendar"] May 04, 2020 by Mäkitalo Asianajotoimisto Oy

For Finnish companies how to survive the corona crisis

In this article we discuss the financial aid programs and legislative changes enacted to support companies and entrepreneurs suffering from crisis following the ongoing corona outbreak.

The currently rampant corona virus has put companies are in a tough spot due to the difficulties, uncertainties and the sudden diminishing of customers. The changes have affected the financial stability of companies quickly, leaving a little time for them to react and adjust their operations in accordance to the situation. In this article we’ve gathered different aid mechanisms directed at companies and entrepreneurs set in place to combat the effects of the difficult financial situation caused by the virus outbreak and to ensure the continuation of businesses.


Business Finland offers financial aid for SMEs and midcap companies

SMEs and midcap companies are eligible to apply for funding from Business Finland. The applicant company or corporation at hand may not have annual turnover exceeding 300 million Euro. The funding is aimed towards companies whose business is suffering due to issues in market and supply chains. Additionally, to be eligible for funding the company must have had stable financial situation prior to the crisis. However, Business Finland is still flexible in its evaluation when it comes to financial difficulties that started in early 2020. The funding is not meant to be paid back to Business Finland. The funding, however, is not applicable to the primary production of farming, fishing or aquaculture. There are two different funding programs and only one of them can be granted to the applying company or entrepreneur.

Preliminary funding is meant to support the businesses in drafting preliminary plans for finding new market and subcontractor solutions. The maximum amount of this funding is 10 000€. The preliminary plan can for instance be drafted regarding the research of the business’ market or customer needs, managing connections, reorganizing work and production or services and products.

If an area that needs developing is detected during the drafting of the preliminary report or otherwise, businesses operating in domestic markets and exporters can apply for development funding for a maximum sum of 100 000€ for the purpose of researching possible solutions towards fixing their supply chain issues and business development. This aid cannot be used towards covering the business’ financial losses. The amount of the funding is 80% of the accepted costs of the project. You can find more information regarding funding on Business Finland’s webpages.


Finnvera offers loan backing for working capital needs and interest free months for their loans and the loans backed by Finnvera

Finnvera’s Start Guarantee helps new Finnish SMEs to obtain bank financing for various investment and working capital needs. Finnvera’s Start Guarantee can be used for working capital needs caused by the coronavirus for companies that have been operating for a maximum of three years. The applying company must be owned by a natural person. The guarantee can also be granted to a registered sole proprietor but not to a co-operative society. The amount of the guarantee is 10 000 – 80 000 Euro but it shall not exceed 80% of the total amount of the loan. The guarantee does not require a self-financing contribution but a special guarantee undertaking lodged by the principal shareholders that covers 25% of Finnvera’s guarantee sum is required.

Finnvera also offers a SME Guarantee directed at Finnish companies that have operated for over three years. The minimum amount of the backing is 150 000 Euro and the backing is 80% of the loan’s total amount. However, the total sum of SME Guarantees granted to one enterprise to different projects may be up to 240 000 Euro.  The loan does not require a self-financed loan guarantee matching. The applicant company must minimally have a Rating Alfa classification of B (Suomen Asiakastieto Rating Alfa classification).

These guarantees are not applicable for agriculture, forestry and construction business’ property development operations. The company’s bank applies for the guarantee in their stead.

Due to exceptional circumstances Finnvera established a Finnvera guarantee. It is a loan guarantee which is processed in an accelerated rate compared to regular guarantees. It can be granted to a company with a rating A in Suomen Asiakastieto Rating alpha classification. The company must have been profitable prior to the financial crisis and it must have enough debt sustainability. The guarantee is for corporate debt bonds valued between 150 000 and 1 000 000 Euro. This guarantee does not require any collateral. To acquire a Finnvera backing, the company must first negotiate a loan with their bank and then apply online at

It is possible to be granted instalment-free months to the loan payment period for loans backed by Finnvera by contacting the granter bank. Finnvera grants banks the possibility to give loans of under 300 000 Euro up to six months of instalment-free payment period extension. Finnvera will not increase the provisions of the guarantees it has granted that are over 300 000 Euro. You can apply for this program on Finnvera’s websites.

Finnvera lowers the pricing on its loan guarantees taken due to the working capital needs caused by the corona crisis retrospectively from March. The annual guarantee provision is decreased to a maximum of 1,75%. Finnvera’s start guarantee’s and SME guarantee’s interchange fee is decreased into 0.1% of the guaranteed amount. The change is applied to guarantees granted since 1.3.2020 and it will be taken into account on the billing of the company without the need of the customer contacting Finnvera. Finnvera will also retrospectively compensate the difference to those customers who have already paid more than the current decreased price.  You can find more details about Finnvera’s guarantees on their Current news for SMEs webpage.


Tesi supports businesses with capital investments

Tesi supports medium-sized companies by establishing a capital investment program that aims to ensure that businesses stay operational despite the financial difficulties of the corona outbreak. Tesi’s investments are between 1 and 10 million Euro. Tesi’s investments are for companies that employ over 50 people and whose annual turnover surpasses 10 million Euro. As an additional criterion the applying company must have been profitable before the crisis and the additional funding must enable the business to survive the crisis. More information can be found on Tesi’s webpages.


Finnish tax administration eases the terms of payment arrangements

Finnish tax administration has reacted to the sudden lack of income for businesses by loosening the terms for entering a payment arrangement program. In payment programs the payments will fall due in three months after the arrangement has become active, as opposed to just one month. This additional payment time is applicable to payment arrangements that have been applied for since 25.3.2020 and it is limited to applications sent before the end of July.

Entering a payment arrangement has also been made easier. However, a company can still only request a payment arrangement if they do not have any taxes in recovery by enforcement and they have filed all the required tax returns and reports.

Ministry of Finance is preparing an amendment to the law regarding payment arrangement programs which, if passed, would lower the interest rate for late payments from the previous 7 % to 4 %. This change would affect taxes in payment arrangement programs since 1.3.2020.


Financial aid for sole proprietors

Sole proprietors may be eligible for financial aid from municipalities. The criteria for receiving the aid is that the proprietor’s business was profitable prior to the crisis. The amount of the aid is 2 000 Euro and it can be used for any business expenses. The aid can be granted for expenses that have accumulated between 1.3.2020 and 31.8.2020. Municipalities start granting financial aid for sole proprietors as soon as possible. The aid can be applied for on paper or online depending on the municipality.


ELY Centre grants 200 million of additional financial aid to SMEs

ELY Centre grants financial aid to SME’s with maximum of five employees. The purpose of the aid is to help businesses in creating situational analyses regarding the economic crisis such as planning of future business operations and the restructuring of manufacturing and services.

ELY Centre also grants financial aid for R&D operations. This funding is meant to be used towards larger operations to increase business’ operational capabilities, such as the development of their subcontractor network or redirecting business operations. These subsidies can be applied for in the Regional State Administrative Agencies e-services.


Legislative amendments to assist entrepreneurs during the financial crisis

The Ministry of Justice is currently preparing temporary legislative amendments to prevent unnecessary bankruptcies and safeguard the operating of businesses. The proposal enables easier granting of instalment-free months or moving due dates to a later date for debts. Additionally, an amendment to the Debt Collection Act would make the maximum collection cost limit for consumer debts also applicable to company debts when the debtor is a SME company.

With amendments to company laws, the corporations are granted more relaxed rules on how to hold their annual statutory meetings. The amendments also allow postponing the meetings into the fall of 2020. Additionally, participating in meetings is encouraged to be carried out with remote connections and by proxy.

Furthermore, the Ministry of Justice has prepared a proposal, which would temporarily remove the presumption in the Bankruptcy Act that a debtor will be considered insolvent if they have not paid their debts within a week from receiving a demand for payment. The creditor’s discretion to sue the debtor for bankruptcy will be limited by this amendment.

The government is preparing a proposal to refund the value added tax a company has paid in 2020 on the company’s request. The company will have to pay back the refunded VAT in a payment arrangement in the future. The amendment will enter into force as soon as possible.


Mäkitalo is a full-service law firm also in exceptional circumstances

The legal experts of Mäkitalo are prepared to safeguard the operation of your company in extraordinary times. Our lawyers are familiarised with the changes brought about by the crisis, thus do not hesitate to contact us, should you require assistance.


Marja Norrena

Partner, Attorney-at-Law

tel: +358 50 527 9896


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