€5.6m of Finnvera pilot loan issued to micro-businesses

By the end of 2024, Finnvera issued €5.6 million of loans aimed at micro-businesses’ growth projects.

Last October, Finnvera piloted a loan aimed at micro-businesses employing fewer than ten people. In the first three months, almost 400 applications were submitted.

Two thirds of all positive loan decisions were awarded to the smallest businesses, those employing 1 or 2 people.

Businesses applied for loans to hire staff, expand operations and related investments, and for international expansion plans.

“Smaller businesses want to go international”

In regional terms, just under half of financing was awarded to businesses in Uusimaa. North Ostrobothnia, Pirkanmaa and Southwest Finland also stand out.

“The finance has been used for purposes such as opening new locations and expanding existing ones, hiring employees or investments needed for growth as well as software product development. Businesses’ product development investments require skilled people, and investments often go hand-in-hand with hiring. International expansion has also become topical for many businesses. It seems that ever smaller businesses want to go international,” says Elisa Sipponen, Regional Manager at Finnvera responsible for small financing.

Loan applications are open until the end of March. At present, around half of the loan application submitted to Finnvera have met the lending criteria.

“Applicants should read the lending criteria on our website before filling out an application. The most common reasons for a negative loan decision are non-compliance with criteria mentioned in the application instructions, such as negative equity, payment defaults or the fact that a business is only starting up and does not yet have financial statements,” Sipponen says.

Finnvera says that a bank is generally a natural choice for a new business’s first finance, but that if a business does not have enough collateral for a bank loan, the bank can apply for a Finnvera start guarantee to secure the loan.

Documents such as a profit prediction to evaluate solvency, as well as a description of the company’s business, that is, a business plan, are required for the application.

Finnvera is also using the loan pilot to establish what finance is available to businesses and how effective it is.

Finnvera micro-business loan

The loan is intended for finance needs to promote micro-businesses’ growth, productivity or competitiveness, such as hiring, expanding operations or digitalization.
Between €20,000 and €50,000 may be borrowed.
At present, the average loan issued is €44,800.
Most loans have been issued to companies in the restaurant, software and retail sectors.
Loan applications are open until the end of March.

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