Amendments to the terms of Finnvera’s counter-cyclical financing

Finnvera will be able to grant Counter-cyclical Loans and Guarantees to companies that have at most 2,000 employees. The maximum sum of counter-cyclical financing that can be granted to a single enterprise will be EUR 20 million. With the permission of the Ministry of Employment and the Economy, these limits can be exceeded for especially weighty industrial and employment policy reasons. The amendments will come into effect on 26 October 2009.

Since the beginning of March, Finnvera has been able to offer counter-cyclical financing for enterprises employing at most 1,000 people. The maximum sum per enterprise has been EUR 10 million. The Government has decided to raise these limits so that, for special reasons, Finnvera can grant a Counter-cyclical Loan or Guarantee to a company with at most 2,000 employees. At the same time, the maximum amount of counter-cyclical financing per enterprise was raised to EUR 20 million. For weighty industrial and employment policy reasons, these maximum limits can be exceeded with the permission of the Ministry of Employment and the Economy.

Finnvera’s counter-cyclical financing is intended for improving enterprises’ financing during the economic recession. Before the financing decision, Finnvera conducts a corporate analysis to determine whether the enterprise has prerequisites for profitable business after the recession. The enterprise must also have a clear plan how it intends to solve the problems caused the recession. Another prerequisite for counter-cyclical financing is that the other principal financiers are willing to grant additional financing or reschedule their receivables for at least one year. This may involve periods of grace or extensions to the repayment term.

In order to be eligible for counter-cyclical financing, a company employing over 1,000 people must engage in operations that are particularly important for the Finnish economy, or locally and regionally significant in terms of employment.

“We have received inquiries about counter-cyclical financing from companies with over 1,000 employees. Now we will be able to provide counter-cyclical financing for these companies as well, to help them over the recession. This may prove to be highly important for employment,” says Finnvera’s Managing Director Pauli Heikkilä.

Between 2009 and 2011, Finnvera can grant Counter-cyclical Loans and Guarantees for at most 900 million euros. So far, counter-cyclical financing has been granted to over 450 enterprises; the total sum is about 165 million euros.

Because the compensation paid by the State to Finnvera for any losses that might arise from Counter-cyclical Loans and Guarantees is higher than the percentage of compensation for other losses, Finnvera can accept higher risks in counter-cyclical products than in other financing products.

Additional information:
Pauli Heikkilä, Managing Director, tel. +358 20 460 7321
Veijo Ojala, Executive Vice President, tel. +358 20 460 7405