In Finland, Business Finland offers funding for research, product development and different kinds of business development needs, especially for small and medium-sized companies operating or intending to operate in international markets, while regional ELY centres offer funding and consulting for local companies development efforts such as internationalisation or product and service development.
There’s several different kinds of funding instruments available. There’s differences in the amount of funding offered (from thousands of euros to hundreds of thousands of euros) and the percentage of the project’s total budget covered (typically 50% or 75%), but there’s also differences in what the funding can be used for (marketing is not acceptable but test marketing is, although conditions apply) and limitations to accepted costs (e.g. 50% of salary costs with exceptions). In addition, there’s differences in funding criteria (available resources and amount of own funding required) and some instruments are intended for very specific initiatives (for example projects with a focus on reducing greenhouse gas emissions).
The Business Finland Innovation Voucher is perhaps the most simple example of available public funding, and although humble (it enables the company to buy €5000 + VAT 24% worth of expert services for which the company’s fee is €1000 + VAT 24%), it certainly is nimble, and technically, available for companies new and old as long as the company is working on bringing to market something that’s new and innovative to them, not necessarily new and innovative in a wider context (although a clear competitive edge does become more important later on when essentially the same amount of available funding is being competed for by more and more companies with great ideas).
Companies can use the voucher to buy expert services from Business Finland’s own pool of vetted service providers like us, or from another company that meets Business Finland’s service provider criteria. The voucher can be used to buy a range of services including, for example, agile product development and feasibility studies and freedom to operate analyses and expert opinions.
The Business Finland Tempo funding is intended for companies not just aiming to bring their innovation to international markets, but also committed to building their expertise. Tempo funding is €50,000, which covers 75 percent of the project’s total budget.
Both of these funding instruments are examples of grants that the companies don’t have to pay back later, provided that the funding terms are adhered to.
This funding can be used for salaries (limitations apply to the entrepreneurs’ own salaries) and for buying certain expert services, although services cannot be bought from interested parties and they can’t be related to the company’s ‘routine activities’.
If a company has been granted Tempo funding and later applies for an Innovation Voucher, the Voucher cannot be granted, but if the company has been granted the Voucher first and then applies for Tempo, Tempo funding isn’t ruled out. Bear in mind, however, that Business Finland funding is discretionary and not a given.
The Business Finland ‘Explorer family’ of instruments is intended for different purposes, ranging from hiring an expert who can help the company enter new markets and exhibiting at an international trade show or joining forces with other companies with shared interests in international markets. The Explorer funding amount depends on the Explorer grant in question from €5000 to €20,000, covering 50% of the purchased expert services or salary costs (incl. side costs and travel).
Business Finland’s Young Innovative Company funding is intended to accelerate the global growth of the most promising Finnish startups that are less than five years old when the funding decision is made. This funding can be used for a wide range of development activities, including, for example, strengthening the team and opening up new markets. Covering direct salaries, travel costs and bought services (conditions apply), this three-phased YIC funding is tied to set goals, with the next phase of funding being contingent on company performance. In total, the Young Innovative Company funding is €1.25 million (comprising €250,000 grant x 2 + €750,000 loan).
Different instruments can and often are used for the same project, just not for the same activities, although there’s exceptions to this, too.
There’s set subjective criteria for public funding, and with more and more companies applying for the available funding, it’s more and more important to have a clear plan, international growth aspirations, an innovative angle and a convincing competitive advantage. In addition, there’s also certain prerequisites related to the team, own funding and de minimis.
ELY centre has recently announced new, partly EU-based financing options intended to help companies with the effects of the COVID-19 pandemic. Importantly, this financing is not de minimis funding.
Regional ELY centres also offer development grants covering 50% of acceptable costs (regional conditions apply) as well as reasonably priced consulting and training services for a variety of needs from IPR services to help with branding and marketing.
Public funding can help offset the high operating costs in Finland, but for a business to succeed long-term, the idea needs to be viable and the execution well-planned.
We offer different services related to funding, from applying to funding to keeping tabs on secured funding and preparing reports and cost statements.
And if you’re not quite sure where to start or what help you might need, we can also start by doing an assessment of your current state and recommend how to proceed.
Contact us for more information, or ask us about using Business Finland’s Innovation Voucher to buy our services.
Next post is about How to conceptualise your idea, and includes tips on how to research.
