The Government has announced a total of one billion euros in funding for small and medium sized businesses impacted by the coronavirus crisis – an increase on their previous announcement.
Business Finland will get €700 million of the money to give grants to small and medium-sized businesses with 6 to 250 employees. Companies working in tourism, creative and performing industries, and all sectors whose production chains have been affected by coronavirus can apply.
So far Business Finland has received 9,000 applications in the first week since their new funding round opened.
“The goal is for as many entrepreneurs as possible to remain profitable during and after the crisis. In addition to direct subsidies, the state guarantees bank loans to companies” says Mika Linitlä (Centre) Minister of Economic Affairs.
ELY Centres for Economic Development, Transport and the Environment will get €300 million to fund companies that employ between 1 and 5 people in all sectors except agriculture, fisheries and forestry. Their application process opens on Friday 27th March.
Opposition wants more say
The National Coalition Party says that if the crisis continues, and they’re expected to be part of a wider political consensus effort, then they also want a greater say in how these economic rescue packages are put together.
“If we are in a [de facto] government of national unity situation, why not have more Parliamentary powers and discussions on these issues? The government brings things to Parliament and we have to be approving things in a great rush. It is cooperation, but we are surrendering” says MP Elina Lepomäki (NCP).
Lepomäki, one of her party’s leading voices on economic policy issues, says that in terms of efficiency of getting money to businesses, Business Finland and ELY Centre applications are not the ideal strategy – she’d prefer to see money being given in the form of tax refunds instead.
“If you go the Business Finland route first of all there’s a cap to how much you can get in grants anyway which is €100,000 which is not huge if you’re talking about a large restaurant business, or a retail store where only your inventory is worth a million euros” she tells News Now Finland.
“So why not do it through the tax system? Companies could get back the VAT or taxes they’ve paid over the first three months of this year, which would immediately help them and be much more straight forward” she says.
The politician does concede that VAT and taxes would theoretically have to be paid back at a later date, but she thinks the tax authorities would be likely to write off much of the money owed so that firms are not going further into economic hardship.
‘There’s not one silver bullet’
Kokoomus has also proposed extending basic social security to all self-employed workers, freelancers and gig-economy workers, which has now been agreed by the government – although MPs haven’t had sight of any legislation yet.
“It’s very important that they also allow such people who are self employed to at the same time be on social security and keep running their businesses so they don’t have to give up their legal status” explains Lepomäki.
“Even if the volume of their business goes down dramatically they can still do what they have to for work and still have social security on the side” she says.
Lepomäki agrees there’s “not one silver bullet” that solves the problems for all types of companies. Getting refunds from the tax system might work for more established or traditional businesses; while applying for grants from Business Finland or ELY Centres might work for entrepreneurs or medium-sized companies.
“What we should have at some point if the crisis keeps going on, that we would be involved in also preparing the legislation at a much earlier stage or even at the stage where the legislation is still in the draft phase in ministries” says Elina Lepomäki.
“It is quite clear now this government won’t be able to implement the government programme, They know it themselves, but we haven’t had the time to discuss it or admit it” she says.
“We do understand the government is operating under extreme pressure.”