Finnish Government announced on Friday additional financing of 10 billion euros available to businesses through Finnvera, the state-owned export credit agency of Finland.
This is another measure with which the Helsinki authorities intend to limit the negative effects on the economy of the coronavirus (koronavirus, in Finnish) epidemic, which is already threatening the future of thousands of companies and jobs.
According to the Ministry of Economic Affairs and Employment, the principal operating model is offering guarantees to banks that grant loans. In addition, the state will increase its coverage of Finnvera’s credit and guarantee losses from 50% to 80%.
“We are taking determined steps to support companies in this exceptional situation caused by the coronavirus epidemic. By making additional financing available through Finnvera, Business Finland and ELY Centres, we are making companies better equipped to pull through,” says Mika Lintilä, Minister of Economic Affairs.
Increase financing authorizations
The Government has prepared a proposal to increase Finnvera Oyj’s domestic financing authorizations from the current maximum of 4.2 billion euros to 12 billion euros.
Under its current authorisation, Finnvera Oyj is able to raise its business financing by 2 billion euros. The increase in its authorization to 12 billion will now make an additional 10 billion euros available to companies.
In addition, the state will increase its coverage of Finnvera’s credit and guarantee losses from 50% to 80%. This allows Finnvera to take bigger risks in these present conditions of economic uncertainty.
Business Finland’s grant authorisations will be also increased by 150 million euros to permit immediate business support measures.
On 19 March, Business Finland launched two new financial services to mitigate the economic impact of the coronavirus epidemic. These services are intended for SMEs and midcaps operating in Finland whose business is suffering from the coronavirus situation.
Financial services are intended for at least tourism and auxiliary tourism services, creative and performing industries and all sectors where subcontracting chains are affected. Government says with those funds companies can explore and tap into new business opportunities in emergency conditions.
The first funding decisions have been "made immediately on 20 March 2020," according to the Ministry of Finance.
ELY Centres’ grant authorizations for business development projects will be increased by 50 million euros.
The additional authorisation will be used to support SMEs particularly in the service sector but also in other sectors as necessary to manage and prevent the effects of the coronavirus.
Financial resources of 500,000 euros will be allocated to the Talousapu financial assistance service for entrepreneurs. In addition, a national model to help entrepreneurs facing financial and payment difficulties will be implemented.
“These are the measures we have now taken to support companies facing hardship due to the coronavirus, but needless to say, more support will be required. We will continue to monitor the situation closely, and make the necessary decisions quickly,” Minister Lintilä says.