COVID-19 Newsroom

The pandemic and its effects on business in Finland.

Financial support for SMEs and mid-caps due to Covid-19

This is a summary of government initiatives to assist SMEs and mid-cap companies and covers financing offered, guarantees and grants as of 3 April 2020. References to the relevant government notices are set out under the relevant sections. Please see our COVID-19 related news in our COVID-19 Newsroom and kindly note that the below summary may be subject to changes as the government may take new actions to address the crisis.



The government has increased business financing due to COVID-19 and is allocating EUR 1 billion in direct subsidies of which EUR 700 million will be through grants provided by Business Finland and EUR 300 million for grants provided by centres for economic development, transport and the environment (ELY Centres). The supplementary budget will become effective on 31 March 2020. The grants provided by ELY Centres are directed to small enterprises with 1-5 employees and are not relevant for the purposes of this summary.

The state-owned investment company Tesi (Finnish Industry Investment Ltd) will, as of 14 April 2020, initiate a financing program in response to COVID-19 to assist mid-cap companies that face temporary challenges.


1.1 Business Finland’s grants for SMEs and mid-caps

Business Finland has launched two new financial services that are intended for SMEs in Finland that employ 6-250 people and for mid-caps that may employ more than 250 people but have an annual turnover of less than EUR 300 million. The grants are directed to fund (i) preliminary studies on business disruptions, and (ii) development funding for business disruptions.

Financial services are provided for all sectors where subcontracting chains have been or will be affected by COVID-19. With the financing, companies can identify, plan and implement new development measures to prevent and remedy market and production chain disturbances caused by COVID-19. The financing may be used to study, for example, new partner networks and new ways to organize work and production.

The amount of funding for a development project is 80 per cent of the project’s approved total costs and in total EUR 50,000 – 100,000. The amount of funding for a preliminary project is 80 per cent of the project’s approved total costs and up to EUR 10,000. A company cannot apply for both fundings at the same time and may receive the funding only once, barring special exceptions.


1.2 Finnvera’s guarantees to business loans

Finnvera, a specialised financing company and the official export credit agency of Finland owned by the State of Finland, among other things, provides various forms of loans, credits and guarantees to SMEs, mid-caps and large corporations which have the potential to operate profitably in the long term. Finnvera has stated that it is focusing on its funding on the guarantees in the exceptional situation caused by COVID-19 and does not at the moment handle direct loan applications.

Finnera’s solutions Finnvera’s Start Guarantee, SME Guarantee and Finnvera Guarantee may be used for working capital needs caused by COVID-19. The Start Guarantee is for companies which have been operating for a maximum of three years, and it may cover up to 80 per cent of a bank loan. The SME Guarantee is directed to companies which have been operating for more than three years may cover a loan of maximum EUR 150,000. The Finnvera Guarantee may also be used for the increased working capital needs due to COVID-19 in cases where Finnvera’s above-mentioned guarantee programs are not suitable in the company’s situation, for example due to the amount of loan needed.

The Finnvera Guarantee’s maximum coverage has been raised to a total of 80 per cent of a bank loan and Finnvera’s total liability has been increased to EUR 30 million. Finnvera may not, however, become the main financier. Finnvera has prepared a so-called fast-track application process to validate guarantees in cases where the capital of the guaranteed loan is less than EUR 1 million.

Companies must first negotiate the loan with the bank before applying for a guarantee from Finnvera.

Finnvera has further decided to reduce and simplify the pricing of the guarantees used in financing working capital for COVID-19. The annual guarantee commission for the above guarantees is reduced to a maximum of 1.75 per cent of the outstanding amount of the guarantee as reported by the bank, and the service fee for the Start Guarantee and the SME Guarantee is reduced to 0.1 per cent of the guarantee. The changes entered into force retroactively as of 1 March 2020 and the new fees will apply automatically.


1.3 Instalment-free period for Finnvera guarantees and loans

Companies which have received direct loans from Finnvera may apply for a twelve-month instalment-free period (using Finnvera’s online services). During the instalment-free period only interests and expenses are payable.

Companies which have received guarantees from Finnvera for bank loans are advised to contact their banks. At the outset, Finnvera grants the banks the permission to grant an instalment-free period of six months.


1.4 Investments by Tesi

Tesi’s financing program aims to avoid that healthy businesses are forced into bankruptcy due to COVID-19. The investment from the temporary program will be made following an expedited process and the size of the investments will be EUR 1-10 million. To qualify for the investment a mid-cap company must (i) have a turnover exceeding EUR 10 million, (ii) have at least 50 employees, and (iii) have been a commercially viable business before the crisis (and the means for commercial viability must remain). The employment impact and turnover should to a significant extent be within, or derive from, Finland.


1.5 Governmental proposal regarding bankruptcy proceedings

The Finnish Ministry of Justice has begun to prepare a governmental proposal to limit a creditor’s right to apply for bankruptcy proceedings of the debtor. Under the Bankruptcy Act, a debtor can be placed in bankruptcy if the debtor is unable to pay its debts and such inability is not temporary.

Under the current Bankruptcy Act, a debtor is presumed insolvent if the debtor has not paid a debt within one week from receiving a payment demand that includes a threat by the creditor of filing for bankruptcy proceedings. The proposal would remove this presumption to help companies with temporary financial difficulties caused by the COVID-19 situation.

There has been no information published on the proposal’s intended entry into force.



2.1 Finnish Trade Register

Due to the exceptional situation caused by COVID-19, the deadline for filing financial statements with the Trade Register has been extended by one month from the end of the financial period. For example, limited liability companies and co-operatives must file their financial statements with the Trade Register within eight months from the end of the financial period. The deadline for filing such financial statements has now been extended to nine months from the end of the financial period.

Other relevant filing deadlines have remained unchanged and the Trade Register’s late filing fee still applies.


2.2 Impact of COVID-19 on company’s general meetings

When planning a company’s general meetings and other events, the restriction by the Regional State Administrative Agencies of limiting events to 10 people should be considered.

Several companies have already decided to hold their general meetings later in the spring. The general meeting may be cancelled even if the notice had already been sent. The annual general meeting must be held within six months of the end of the financial year, unless otherwise provided in the articles of association or the shareholders’ agreement. The Finnish Limited Liability Companies Act also allows electronic voting. With the consent of all shareholders, it is also possible to make decisions without holding a physical meeting. Thus, this limitation it is not a concern for companies with a low number of shareholders.



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