Frequently asked questions – financing a startup company

Finnvera’s financing in the form of debt capital, i.e. loans and guarantees, comes into play only once the company’s actual business operations have started. We assess the company’s repayment ability based on turnover and profit plans. Without realized turnover or orders, this assessment cannot be carried out. An exception to the above is Finnvera’s start guarantee for loans granted by banks.

For a startup company in the product development phase, the primary sources of financing are own investments and venture capital, as well as Business Finland, which funds the development of innovations aimed at growth, internationalization, and new business activities.

Equity investments from private investors, i.e. business angels, can be sought through FiBAN (Finnish Business Angels Network).

Financing for business development can be applied for from your regional ELY Centre.

At Finnvera, we finance Finland’s boldest growth companies. R&D-intensive startups and scaleups are important to us. When traditional financing methods are not sufficient, we take a controlled risk and open the door to investments. We work in cooperation with venture capital investors and the Team Finland network.

A startup can apply for financing from Finnvera when business operations are underway, cash flow is emerging, and a commercial breakthrough is near.

Finnvera supports sustainable growth by offering climate, digitalization, and innovation loans, and by taking sustainability into account as part of financing decisions.

Finnvera’s climate and environmental loan can be used for investments that support the green transition. Possible uses include renewable energy, energy-efficient buildings, low-emission transport, circular economy, and green technology.

The climate and environmental loan can be used to finance projects where materials are reused, products are repaired or recycled, and efforts are made to prevent waste generation. The goal is to extend the lifecycle of goods and reduce environmental impact.

The financing can be used for electric transport infrastructure, such as charging networks or the electrification of logistics. A loan can help companies transition to cleaner transport solutions.

If the bank is not willing to finance your company at this stage, it is still worthwhile to discuss the project with Finnvera. We have the possibility to finance innovative and scalable companies even without the bank, provided that other parties participate in the financing. Such a case often arises during a funding round where the company raises significant new equity. Finnvera’s loan can then be part of the overall financing package. However, Finnvera never finances a project alone; the risk is always shared among several financiers.

Yes, it is possible. An equity funding round is a good time to also talk with a lender.

Own financing is in principle always required. The share of own financing is determined by the project’s content and the company’s risk category.

Depending on the overall financing package and instrument, the share of own financing in a project is typically 20–50 percent. Own financing can consist of new equity or funds already available in the company’s cash reserves.

However, with the start guarantee and SME guarantee, a company can be financed without own financing. Nor is own financing required in the Entrepreneur Loan, which is a personal loan granted to the entrepreneur.

A bank loan guaranteed by Finnvera or a loan from Finnvera cannot be used as own financing in a Business Finland project.

For a loan granted by Finnvera, repayment holidays can be granted for justified reasons. Repayments start no later than 12 months after the loan has been drawn.