Finnvera’s ceilings on outstanding commitments to increase

The President of the Republic of Finland has ratified the laws according to which Finnvera’s ceilings for granting financing will be increased. The ceiling on outstanding commitments in domestic financing will rise from EUR 2.6 billion to EUR 3.2 billion, and that in export financing will increase from EUR 7.9 billion to EUR 10 billion.

Through the increase in the ceilings on outstanding commitments, the State aims to secure Finnvera’s ability to finance profitable business operations during the financial crisis. The financial market crisis has increased the demand for domestic financing provided by Finnvera by 18% in Finland and by 386 % in exports compared to the previous year.

EUR 1.2 billion for securing customer financing in exports through refinancing

The liquidity problems of parties that finance exports are to be facilitated using the new refinancing model. A Finnish or foreign bank which finances a foreign buyer can transfer buyer credit related to exports or part of it to be financed by Finnvera’s subsidiary Finnish Export Credit Ltd if financing with reasonable terms cannot be obtained for the project elsewhere.

At this stage, Finnish Export Credit Ltd can refinance export projects by a maximum of EUR 1.2 billion. Of the assets, EUR 700 million is acquired from the market in the name of Finnvera using the State’s guarantee. The remaining EUR 500 million is obtained through the State’s financing. The aim of these arrangements is to secure the continuity of financing for exports during the financial crisis. The need and sufficiency of continuing the arrangement will be assessed next year.

“The arrangement alone does not solve the current financing problems of companies, but it will alleviate the availability of customer financing for Finnish capital goods exporters,” says Topi Vesteri, Deputy Managing Director. “Credit risks related to export trading will be assessed separately for each case.”

Ceiling on outstanding commitments in domestic financing will increase by EUR 600 million

Finnvera estimates the demand for financing to increase in Finland next year. The rise in the ceiling on outstanding commitments will make it possible to finance a greater number of projects deemed to be profitable.

The State capitalises Finnvera’s subsidiaries Seed Fund Vera Ltd and Veraventure Ltd by EUR 30 million. Seed Fund Vera specialises in capital investments in new starting companies and Veraventure in regional capital investment funds.

Finnvera financing is always based on a business analysis identifying whether the company has the prerequisities for profitable business in the near future. In practice, Finnvera always shares the risk with other financiers. In Finland, the company can finance small and medium-sized companies in business areas other than actual agriculture and forestry, and construction development.

“We will act according to our financing criteria as we have up to today. Risk distribution means, even in difficult times, that additional investments can be required from owners and other financiers,” says Pauli Heikkilä, Managing Director.

For further information, please contact:

Pauli Heikkilä, Managing Director, tel. +358 20 460 7321 or +358 400 429 210
Topi Vesteri, Executive Vice President, tel. +358 20 460 7238 or +358 400 702 002 (export financing)
Veijo Ojala, Executive Vice President tel. +358 20 460 7405 or +358 400 672 401 (domestic financing)

Leena Jaakkola, Senior Vice President, Corporate Communications and marketing, tel. +358 20 460 7232 or +358 40 352 9332

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Finnvera Plc

Finnvera Plc is a State-owned special financing company which, through its services, supplements the Finnish financing market. Through its financing operations, the company promotes business operations, regional development and exports conducted by Finnish companies.

Finnvera provides small and medium-sized companies with loans and guarantees in Finland, and exporters and export financiers with export guarantees. The company takes part in financing the operations of companies based on a profitable business idea when the risks related to the company’s financing prevent financing from commercial financiers.

Financing provided by Finnvera includes consideration. The financing price is affected by risks and the guarantees available.

Finnvera can finance small and medium-sized companies operating in Finland in business areas other than actual agriculture and forestry, and construction development. Export financing does not include any limitations of business areas.

Finnvera divides risks with other financiers and is only involved in projects it deems profitable. Private financing plays the leading role in projects where Finnvera is generally involved as a partial financier.