Applying for financing when setting up a business

Table of content

Applying for a Start Guarantee

It's often most convenient for a new company to apply for financing from a bank. However, if you are seeking a loan from a bank but do not have the collateral required by the bank, a Start Guarantee provided by Finnvera may be the solution.

The bank submits the application for the guarantee directly to Finnvera on your behalf. You or your company don’t need to be in direct contact with Finnvera.

Start Guarantee applications are handled based on the information provided by the applicant's bank.

Applying for other financing

If Start Guarantee is not applicable for you financing need, other guarantees by Finnvera can be applied for easily and securely through our online service. You can log in to the online service with your personal online banking credentials or mobile certificate.

You can apply for financing already before you have set up your company. However, financing documents can only be created and the financing can come into effect when your company has been entered into the trade register.

The financing applicant who authenticates oneself in our online service must be a person in charge at the company and have the authority to sign on behalf of the company, or be the owner of a company being established. The company’s contact person named in the financing application can be any of the aforementioned or a company employee who has been given a power of attorney.

Information required for the application

If you apply for our other financing solutions through the Online Service, following information on the company, the entrepreneur and the project is required:

  • basic details of the company, the entrepreneur and the owner
  • project description
  • overall project financing plan

The company's business and performance plans for the next three years must also be provided. This information must be provided on a separate attachment or it can be entered on the application's interleaves.

An active company must also submit the financial statements for the previous three financial years and, for the current financial year, the latest available figures. In company acquisitions, the financial statements of the company to be acquired for the previous three financial years and its articles of association or memorandum of association (if available) must also be attached to the application.

You may also enclose other attachments to the application that you consider important for its processing. 

How is the company assessed?

If your bank files an application for a Start Guarantee on your behalf, our financing decision is based on the bank's assessment of your business's operating potential and creditworthiness.

When using other financing solutions Finnvera will examine your company's ability to engage in profitable business and put its plan into effect.

Finnvera assesses the company's aims, finances, development plans, outlook and competitive position. The adequacy of the overall funding and self-financing arrangements is also examined. The entrepreneur must also have good financial standing.

Role of collateral

Even though our funding decisions are based on an assessment of the companies' prospects, collateral also plays a role. The need for collateral is examined on a case-by-case basis.

When using a Start Guarantee a special guarantee undertaking lodged by the principal shareholders must cover 25% of Finnvera’s guarantee sum. The minimum amount of the guarantee undertaking is EUR 3,000.

When using other financing solutions Finnvera primarily requires that the principal shareholders in a limited liability company make an investment in the company's equity. If this is not possible a personal guarantee will be required. The size of the investment or guarantee should be 20 % of the liability yet at least 3 000 e and at most 20 000 e. Sole proprietors and general partners in general partnerships and limited partnerships are also otherwise personally liable for the loans of their enterprises.

Business mortgages or real property mortgages are often used as collateral in projects requiring more substantial financing. However, Finnvera does not use the apartment owned and used by the entrepreneur as collateral.

Financing decision

Start Guarantee

We will normally process the Start Guarantee applications filed by the bank within three working days. Then we will inform the bank of our financing decision. The loan and repayment terms are in accordance with the loan agreement concluded with the bank.

Other financing solutions

If you apply for our other financing solutions through the Online Service, we will call you within a week after we have received your application. Decisions concerning small projects will be made in about two weeks. In projects with more substantial financing requirements we aim to make the decision within the time limits set by your customer's project.

Favourable decision

If Finnvera accepts you application we will give you a financing offer. If you decide to accept the offer, contact the person whose name appears on the offer and make arrangements for accepting the loan or having the guarantee take affect.

After the conditions in the financing offer have been met and the documents have been signed, the loan can be paid to the account you have given us or the guarantee be given for a loan from another offerer of financing.

Negative decision

If Finnvera rejects your application, you will receive a written notification giving the grounds for the rejection.  If necessary, you can go through the decision in more detail with a Finnvera representative by telephone.

The most common reasons for rejecting a loan application:

  • Finnvera is of the view that your company will not be able to engage in profitable business.
  • Your company's financial situation is too challenging for an external provider of funding. 
  • Because of legal provisions, Finnvera is unable to provide financing for the sector in which your company operates.
  • There is overcapacity and tough competition in the sector.
  • Self-financing arrangements are insufficient.
  • You have tax debts or are in default on your payments.

Despite a negative decision on a loan application, Finnvera may still be able to provide part-guarantees for a bank loan, which may be of crucial help in the getting of the loan. 

With all inquiries regarding applications please contact our customer service at +358 29 460 2582.