Business Operations

The economic situation posed challenges both to enterprises operating on the domestic market and to export companies. As in the previous year, continued uncertainty in the global economy dampened companies’ willingness to invest, make growth plans, and take risks.

However, a positive feature was the upswing in companies’ ownership arrangements in 2015. Financing for ownership arrangements increased by more than 30 per cent compared to the previous year. It is estimated that Finnvera is involved in every third company acquisition. Otherwise, despite the improved investment expectations of SMEs, there was no change of course in the allocation of financing. Financing was still needed considerably more for working capital than for investments. It is four years since investments accounted for a larger share of financing offered to SMEs than working capital.

Long-term financing played an important role in negotiations for export-related purchase agreements. Banks were still cautious when financing transactions requiring long repayment periods; in consequence, the role of Finnish Export Credit, in particular, was emphasised. Institutional investors participated in loan arrangements on credit markets slightly more than before but, owing to investors’ expectations for returns, demand and supply did not meet in export credits, with a few exceptions.

The possibilities of different-sized enterprises to receive financing from Finnvera improved markedly at the start of 2015, thanks to the decisions made in late 2014. Financing through bond subscriptions, guaranteeing large enterprises’ domestic investments relating to exports, and the possibility to provide financing for enterprises larger than the SME definition applied by the EU diversified the selection of means considerably. Finnvera can grant bigger loans to small enterprises than before as the maximum level of micro-financing was raised to EUR 50,000. For other enterprises, Finnvera normally shares the risks of financing equally with the bank, but in the case of high-impact projects and in the financing of trading, Finnvera’s share can be larger than before. Financing can also be granted with less collateral than normally; it is even possible to finance growth with no collateral at all if the enterprise’s financial standing is sufficiently solid. For investment projects it is possible, if necessary, to grant financing with a longer repayment period than that allowed by banks.