Finnvera’s guarantees and loans subject to State aid monitoring

As a publicly owned financing company, Finnvera plc must comply with the EU rules on State aid when offering financial services. As of the beginning of 2010, not only loans but also guarantees granted by Finnvera are subject to State aid monitoring.

Loans and guarantees granted by Finnvera are considered to include State aid if the price an enterprise pays for the financing is lower than the reference price determined by the EU Commission. In conjunction with each financing decision, Finnvera checks whether or not the financing includes imputed State aid. If it is considered that the financing includes aid, Finnvera selects the type of aid applicable to that particular case and ensures that the conditions associated with that type of aid are met. Owing to international agreements, however, export guarantees must always be priced so that they do not include aid.

Irrespective of the type of aid, Finnvera’s decision to grant financing is always based on individual assessment. The price of financing depends on factors such as the client’s estimated ability to repay and the collateral available.

Calculation of aid

Depending on the type of aid selected, the calculation of aid is specific to each project or specific to each company. In a case of project-specific aid, the amount of aid may not exceed a certain percentage of the project costs, as defined by the EU Commission. Company-specific aid has a certain maximum limit for the aid that the company can receive within a period of three years.

The calculation also includes aid that the company receives, or has received, from other public bodies, such as municipalities, Centres for Economic Development, Transport and the Environment, and Tekes. In fact, a precondition for the calculation of company-specific aid is that the company itself is aware of the total amount of aid it has received from various sources during the period under monitoring.

In connection with the first loan disbursement or the entry into force of a guarantee granted by Finnvera, the company is given a written itemisation of any company-specific aid included in the financing.

Types of aid

Financing granted by Finnvera for investments may also include investment and employment aid granted to SMEs in accordance with the General Block Exemption Regulation (‘SME aid’). SME aid is project-specific aid, which cannot exceed 20 per cent (small enterprises) or 10 per cent (medium-sized enterprises) of the total investment costs.

Finnvera’s financing may also include de minimis aid accumulated for enterprises. Until the end of 2010, Finnvera applies a temporary limit of EUR 500,000 for de minimis aid. Starting at the beginning of 2011, de minimis aid will again be calculated so that its maximum amount for an enterprise during a period of three years is EUR 200,000.