New Finnvera loan for microenterprises to ease hiring

Finnvera can issue the loan for hiring staff; single-person business owners are also eligible.

Finnvera says the availability of credit to SMEs has weakened over the past year. At the same time, businesses’ growth appetite has been weak for a long time.

The most recent SME barometer shows that more businesses have not received or applied for loans even though they would have needed one. In 2021, such businesses made up 25% of all SMEs; in 2024, the figure had risen to 43%.

Difficulties securing credit have delayed or at worst cancelled businesses’ investments. The economic climate has also hampered more SMEs’ solvency.

Smaller companies’ access to finance looks particularly concerning. Finnvera intends to help ease the situation by temporarily issuing loans for microenterprises’ growth.

“The spring 2024 SME barometer found that microenterprises’ credit problems were greater than among other SMEs,” says Elisa Sipponen, Regional Manager at Finnvera.

Applications for the loans are open from 1 October until 31 March 2025. While Finnvera processes loan applications, it will also gather data about microenterprises’ financial circumstances.

“One of the goals of this fixed-term loan issuing period is to find out how available and effective finance for microenterprises is in Finland. The number of companies facing difficulties accessing finance in Finland is almost fifty per cent higher than in comparable Nordic countries,” Sipponen says.

Loan up to €50,000

Finnvera issues its temporary loan to EU-defined microenterprises that apply to finance investments and development action to improve the business’s operations and competitiveness. These could include growth investments and new hires.

“Hiring staff can be a big risk for a small business. The smaller the business, the larger the leap to hiring staff is,” Sipponen says.

Finnvera will issue loans between €20,000 and €50,000. When processing applications, Finnvera will assess companies’ repayment ability and whether the company has the wherewithal for profitable business. A company which was operated for at least one complete financial year may apply. Single-person businesses may also apply.

Sipponen says that banks will continue to be businesses’ primary sources of finance. The SME barometer shows that 75% of strongly growth-oriented companies required a Finnvera guarantee to secure finance.

Sipponen thinks that more stringent regulations could worsen small businesses’ circumstances.

“Good working relations with banks are important for small businesses.”

Investment appetite still modest

The results of the SME barometer show that in all main industries, there are more businesses reducing investments than those who expect to increase their investments. However, there are promising signs in the air, as compared to the last barometer, SMEs’ recruitment intent seems to be rising. Fourteen per cent intend to increase headcount, while 11% intend to decrease it.

SMEs’ growth appetite is also growing slightly. The barometer found that over one third of SMEs is growth-oriented, either strongly or as far as possible. The share of strongly growth-oriented SMEs has risen slightly from the rock-bottom figures in the spring. Nevertheless, growth appetite is still modest compared to past periods.

“The long-term trend of falling growth appetite seems to have stopped. Finland needs more growth appetite and reforms to encourage even more business owners to take risks and growth steps,” says Juhana Brotherus, a Vice President and Chief Economist at Suomen Yrittäjät, the Finnish SME association.

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