Finnish Government announced on Friday the allocation of 1 billion euros for direct business subsidies in order to limit the damage caused by the coronavirus (koronavirus, in Finnish) epidemic.
Of this amount, 700 million is intended for grants provided by Business Finland and 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 Thursday 26 March. The supplementary budget will become effective next week on 31 March.
“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.
The Ministry of Economic Affairs and Employment explained in a press release that small enterprises suffering from market and production disturbances caused by the coronavirus outbreak may get support from the centres for economic development, transport and the environment. The centres will provide financing for companies that employ from 1 to 5 people.
Financing for small enterprises
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.
Business Finland has also launched two new financial services owing to the coronavirus epidemic. They are intended for small and middles size enterprises (SMEs) that employ from 6 to 250 people and for midcaps that may employ more than 250 people but have an annual turnover of less than 300 million euros.
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, Business Finland had received more than 9,000 financing applications from companies.
Business loans guarantees up to 80%
In addition to direct business subsidies, the state will guarantee bank loans to companies. On 20 March, the Government announced that it would enable additional financing of 10 billion euros 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% of the bank loan. If the capital of the guaranteed loan is no more than 1 million euros, Finnvera is prepared to fast-track the application processing and decision-making. The previous limit for fast-tracked processing has been 150,000 euros.
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.