New companies typically lack funds. This is the reason why quite a few companies have to shut down their business only after a few years. To prevent this, various types of funding are provided for companies. However, business funding is mainly aimed at start-ups that employ people, not so much at sole entrepreneurs.
Business funding often comes in the form of a loan which you will pay back according to the signed agreement. The funding options are usually based on the premise that the company will eventually succeed, which will enable it to pay back its loan. This way, the investor profits from their risk-taking.
For sole entrepreneurs, the cheapest source of funding is personal savings. This way, they can avoid loan interests and management fees. Therefore, it is smart to build up savings before starting a company. Of course, this is not always possible. It is important to understand that if the company does not succeed, you can lose your savings and assets. Self-employed people should be careful about taking a loan. Unpaid debts can cripple your professional life, sometimes for a long time.
One form of financial support targeted at sole entrepreneurs is the start-up grant for which you can apply at the TE Office. Also ELY Centres provide various forms of financial support, such as the business development aid and the rural business development grant, which self-employed people can potentially be entitled to in some situations.
People working in the fields of science and culture can apply for personal grants or grants paid to a working group. Grants are awarded by the state, municipalities and private foundations. However, grants for science and arts are not meant for funding companies. Grants are often awarded to distinguished experts or people working on new, innovative projects.
When you apply for business funding, a loan or a grant, examine the application instructions carefully. Funding can only be awarded for targets that meet the requirements set by the funding provider. Formulate the application text as clearly as possible. You can include important details in attachments. The core idea to keep in mind when writing the application is to consider the addressee. They potentially read several applications during their workday, so presenting your arguments clearly improves the chances of your application being approved.
Start-up grant
Start-up grant is an aid for entrepreneurs in the first phases of starting a business, at which point their income may be quite small. The grant amounts to a gross sum of about 700 euros per month. Gross sum means that you pay a tax on it at your withholding tax percentage rate. The start-up grant fosters the growth of new business and employment. It secures entrepreneurs’ subsistence during the time it takes them to start and establish their business but for a maximum of 12 months.
https://www.te-palvelut.fi/employers/for-entrepreneurs/services-new-entrepreneurs/startup-grant
Pay subsidy
Pay subsidy is an economic benefit that the TE Office may grant an employer to cover the pay costs of an unemployed jobseeker and compensate the time spent on guiding the new employee. Employers can only get pay subsidy for hiring people who have registered as an unemployed jobseeker at the TE Office.
Meeting certain requirements, sole entrepreneurs can hire an employee to their company with pay subsidy.
https://www.te-palvelut.fi/jobseekers/support-finding-job/get-pay-subsidy-card-find-job
Crowdfunding
Crowdfunding means collecting funds from private people or companies. It entails gathering investments for a set project from a large group of people, usually via online crowdfunding platforms. Crowdfunding activities are governed by the Crowdfunding Act and regulated by the Financial Supervisory Authority.
https://mesenaatti.me/en/info/mika-on-mesenaatti-me/
Rural business development grant
You can apply for the rural business development grant, granted by ELY Centres, even if your company does not operate in the agricultural industry. Investments and new companies are supported to foster the growth of business and the creation of jobs in rural areas, and, consequently, increase the vitality of these areas. You can apply for the rural business development grant from an ELY Centre or a local Leader Group.
https://www.ely-keskus.fi/en/web/yrittajan-talousapu/
Business development aid
ELY Centres can participate in funding business development. Funding is always awarded on a discretionary basis, and different forms of funding feature different prerequisites that the applicant and the project have to fulfil. Business development aid can be granted to a business project that improves the company’s competitiveness in the long term and is estimated to have a significant influence on its growth, technology, internationalisation, productivity or business know-how. The company itself has to fund at least half of the project.
You apply for the business development aid before starting the target project. You submit the application to the ELY Centre in the region where the project is undertaken.
Corporate loans
A successful, growing company can get a loan easily. But where could a new company with no collateral get a loan? A loan is a viable option when you have distinct prospects for running a successful business but no funding for the company. However, you should have a clear plan and good possibilities to pay the loan back.
Grants
You can seek the Aurora Database for Finnish funding opportunities for science and arts, both project funding and personal grants. The database contains funding opportunities from over 400 funders, and new information is added constantly. The contents of the Aurora Database are gathered directly from funders.