How can I get funding for the development and growth of my company?

Developing a company's operations requires resources. For many founders of a new company, a bank and a loan guaranteed by Finnvera are familiar forms of financing. According to the SME (Small and medium-sized enterprises ) Barometer conducted by Finnish Entrepreneurs, Finnvera and the Ministry of Employment and the Economy, the bank is the primary financier for almost 80% of Finnish SMEs. However, a number of other financial instruments are also available to companies to help them raise resources for business development. Our own observation is that not enough is always known about these forms of funding and support. In this article, we’ll talk about the most important tools a company can use to get more resources for business development.
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There are a couple of facts to keep in mind when thinking about financing for development. The funding available for business development is always discretionary, not automatic funding. Therefore, the company must have a good and clear plan on how and by what means the business can be developed. A business plan must therefore be drawn up and a project plan for the development project is also needed. In addition, most forms of funding are not 100% aid, but also require a company's own contribution. Self-financing can be a company's income financing, loan or investment. The amount of aid granted to a company varies according to the type of aid.

With covid-19 pandemic, the subsidies distributed by the state to companies certainly became known to everyone. Through Business Finland and the ELY Centers, a total of more than EUR 1.3 billion in support funding was distributed to companies for business development projects in this difficult situation. In addition, the State Treasury has since distributed a significant amount of cost support to companies.

The funding available from the state is by no means limited to crisis support, but companies can receive significant support from Business Finland and ELY centers for development projects, growth and internationalization. However, it must be kept in mind that corporate funding is not intended to save a company from financial distress (with the exception of the above-mentioned covid subsidies), but is intended to help companies develop and grow.

Business Finland (formerly Tekes) is a state-owned limited liability company that supports small and medium-sized, innovative companies that aim for growth and internationalization with loans and grants. So if your company has a new product or service idea and is interested in using it to enter the international market, Business Finland is your potential financier. However, it is worth noting that Business Finland's financing is highly competitive and Business Finland sets strict criteria for the company in terms of internationalization, the adequacy of the company's resources and expertise. From this link you can read more about Business Finland financing.

If your company is just planning to internationalize, the Innovation Voucher issued by Business Finland is a good help to take the idea forward and acquire external expertise. The value of the innovation voucher is € 6,200 (€ 5,000 + VAT). The company's self-financing contribution is € 1,000 + VAT. With the innovation voucher, the company thus receives a € 4,000 grant for the purchase of external know-how in a development project aimed at internationalization.

Criteria for issuing an innovation voucher:

The company must be a micro or SME

The business form must not be a sole trader or a rural group. Associations, foundations or public non-profit organizations are also not eligible to apply for an Innovation Voucher.

Business must be full-time

The company must not have any deficiencies in declarations, tax debts or enforcement debts. Customer information Alpha rating must be at least A

The expert service acquired on the banknote must be new expertise for the company, and the service must not be acquired from an interested company

The company must also not already be involved in other forms of financing by the Business Final and the company's de minimis quota must not be exceeded (€ 200,000 received support over the last two years)

ELY centers and Leader groups also support the growth and development of companies. In practice, these organizations share the same funding pot, but the difference is that Leader groups focus on serving rural micro and SMEs.

A company in the start-up phase can receive a start-up grant of € 5,000–35,000 or a trial of a new business product or service for € 2,000–10,000. No company contribution is required for this support. Support is applied for through ELY's electronic transaction service (the link is unfortunately only in Finnish) and the Finnish Food Authority's Hyrrä service (the link is unfortunately only in Finnish). When applying for support, care must be taken to ensure that the company's business plan and the action plan related to the implementation of the measures financed by the support are in order.

Growing and developing companies that have passed the start-up phase can apply for a Company Development Grant from the ELY Center to develop an existing business or create a new business. The support rate for the development measures included in the project is 50% and the investment support is 10-35%. It should be noted that when applying for a development grant, the application must already be accompanied by the offers from a procurement service or procurement provider.

Here were the main corporate financial services provided by the public sector. In addition, there is a wide range of private financial services, the use of which should be assessed and, if necessary, selected to best suit the situation.

Applying for funding is always a time consuming process that needs to be looked at carefully. Help is available and worth asking for. The emergence of a good business idea or the growth of a company should not be postponed due to the small amount of cash or income financing. 

Founder, Strategist