The Finnish government wants to extend to all sole entrepreneurs, including to those with very small businesses, its support for companies that have been affected by the new Covid-19 restrictions that took effect in March.
According to the Ministry of Economic Affairs and Employment, the business cost support is direct financial aid to companies, which does not need to be paid back.
As before, the support is compensation for the company’s inflexible costs and payroll costs, but it does not compensate for a fall in turnover. Its objective is "to help companies in the difficult situation caused by the coronavirus."
The Government is now proposing amendments to the Act on Support for Business Costs, which would make it possible to grant aid more flexibly, especially to sole entrepreneurs and small enterprises.
“As a matter of urgency, the Ministry of Economic Affairs and Employment is preparing a support model for the reasonable compensation of businesses affected by the new closure announced in March. The Government’s proposal on a third application round of business cost support applies to business activities before this closure in March,” says Minister of Economic Affairs Mika Lintilä.
Fall in turnover
The third round of business cost support is intended for companies whose turnover has fallen more than 30% due to the coronavirus pandemic between 1 November 2020 and 28 February 2021, compared with the corresponding period in 2019–2020.
Support for sole entrepreneurs will be part of the business cost support. Municipalities will not organize a separate application round of support for sole entrepreneurs.
A minimum support of 2,000 euros will be paid to sole entrepreneurs if they meet the conditions for it. The amount of support will be based on the decrease in the company’s turnover and actual costs.
To be eligible for business cost support, the company must have a Business ID and eligible expenses of at least 2,000 euros during the support period. As before, there will be no lower limit on the turnover of the company.
All companies can apply
All companies can apply for this support. The Government will later issue a decree on the sectors that can apply for support without providing further justification. If a company does not operate in one of the sectors defined in the decree, it must justify the need for support and provide an account of the loss of turnover due to Covid-19.
Previously, sole entrepreneurs and small enterprises were able to apply for business cost support, but no aid was granted to companies where the support would have amounted to less than 2,000 euros.
The definition of inflexible costs which support can be applied for has been specified. In addition, the employer’s non-wage labour costs, such as social security contributions and occupational health expenses, would be accepted as costs, calculated as a percentage of the payroll costs over the support period.
Maximum amount 1 million euros
The maximum amount of aid will increase and thereby meet the needs of large companies in particular. The maximum amount of aid a company can receive will rise from 500,000 to 1 million euros.
The aid already granted will be taken into account in the amount of the business cost support so that the total aid granted under the same temporary State aid rules of the European Commission will not exceed 1.8 million. The ceiling was previously 800,000 euros. The new maximum amount is based on the Commission’s decision to raise the company-specific ceilings for aid.
The first application round for business cost support took place in July–August 2020. The second round began in December 2020 and ended in February 2021. The budget for the third application round is 380 million euros.
The Government submitted its legislative proposal to Parliament on 4 March. After Parliament’s consideration, the President of the Republic will approve the Act. Consequently, the State Treasury could start accepting applications from companies and sole entrepreneurs at the end of April. The basic conditions of the aid will remain unchanged.