LOAN TERMS AND CONDITIONS
Amendments to loan terms and conditions
Business Finland loans are usually unsecured loans. Amendments to the loan terms and conditions are regulated by Government Decree 1444/2014.
If the project has failed or the utilization of its results is considerably delayed, you may apply for amendments to the loan terms and conditions.
- The principal subject for an amendment is the loan period. The loan period may be extended to at most twenty years on very weighty grounds. If the loan period exceeds ten years, it may be extended by at most three years at a time. The grace period may not exceed ten years. The loan period may be extended to permit the company to defer repayment of the loan until sufficient time has passed for the project’s academical and commercial success to be determined with more reliability.
- Amendments to the loan period and waiving of loan repayment are possible only for installments that have not yet come due. Before submitting an amendment application, a payment plan for due loan installments must be negotiated with the State Treasury.
- If the financial utilization of the project or its results fails, the remaining principal and interest may be waived in part or in full in exceptional cases. Repayment may be waived up to the maximum amount of funding specified for the project. The estimated maximum amount of funding is stated in the funding decision.
- Repayment of the loan principal may not be waived for Young Innovative Companies funding decisions made before 15 February 2018.
- The loan period cannot be extended nor repayment waived solely because the project’s intended impacts, as declared by the company during the application phase and indicated in the funding decision, fail to materialize or because the company is in a poor financial situation.
Amendments to loan terms are not permissible, if
- the company has negative equity and the loss of equity has not been reported to the trade register
- the company has not repaid a loan due for payment and has not made or adhered to a payment plan
- the company has outstanding tax debts, for which it has not made or adhered to a payment plan
- the company has statutory pension or insurance contributions that are outstanding or subject to enforcement measures
- the company is unable to conduct continuous or profitable business
- the company is unable to repay any nominal remaining capital
- it is too early to assess whether the project is a financial failure. Despite this, the loan period may be extended.
Repayment of the loan cannot be waived if the company has not decided to stop using the results of the project (the developed product is still being marketed, for instance), or the company has not waived its industrial property rights on the results developed in a project funded by Tekes/Business Finland.
Applying for an amendment in loan period
Apply for an amendment in the loan period with a free-form application. Provide thorough justifications for the applied amendment. Send the application to Business Finland’s record office by secure email.
How to apply for a waiver of repayment
Answer the following questions in your application. Based on your answers, Business Finland will assess whether repayment of the loan can be waived or whether grounds exist for extending the loan period. Business Finland may request further details on matters that it considers relevant for the loan amendment application. Business Finland may seek additional information by means of, for example, an Adviser visiting the debtor company or another location where the developed product may be in use.
Basic information on project
- Record number of funding decision
- Name of project
Realization of the project
- In what way has the project failed?
- What reasons led to the project's failure (e.g. a delay, inadequate funding, unexpected technical obstacles, lack of skilled personnel, rapid development of a competing technology, etc.)?
- Provide a calculation on the annual breakdown of the turnover, itemizing everything from expenditure to profits, generated by the business or product/products resulting from the project. The calculation should also take account of the costs associated with the development of the business/product. (Example calculation on the right)
- How many items or units of the product have been delivered?
- To whom was the product delivered? List mention key customers / amounts sold in euros.
- What quantities of the product/service would you have needed to sell at the defined price in order to make the project profitable?
Marketing of the product/business
- Will you continue to market the product/business?
- How has the business/product been marketed (distribution channels, dealers, agents)?
- Have there been any marketing problems? If yes, please specify.
- Is the product/business technically and economically competitive?
- Are there competing products on the market that are significantly more competitive?
- What are these more competitive products and what is the basis of their competitive advantage?
Business resulting from the project
- Will you or someone else make future use of the results of the project? Is the product in your company's own use?
- Do you in some way intend to continue with the R&D work related to the project?
- Has your company obtained overall expertise, which it can use in its operations, from the project?
- Does the project involve any patents or other intellectual property rights, and who has ownership of them?
- Have the intellectual property rights or product rights related to the project been sold or handed over to a third party?
- Has the sale of IPR or product rights related to the project been settled?
- Where will the product be used (company, contact person, address, telephone number)?
- Who, in addition to the staff of your company, can Business Finland contact to discuss the project?
- Have negotiations been held with other funders on the rearrangement of loans taken out by the company?
- Have any plans been made or negotiations been held on the sale of the company or the business related to the project?
Send the loan amendment application and attachments by secure mail
In your application, state the reasons for seeking the amendment and answer the questions listed above. Please attach the following to your application:
- a recent (up to 2 months old) accounts ledger, income statement and balance sheet, cumulative from the start of the fiscal year, long version
- a monthly cash flow forecast for the next 12 months from the accounts ledger
- in repayment waiver applications, a calculation of the life-cycle business of the product/service developed in the project
- in the case of negative equity: a plan by the company’s board of directors to correct the situation
- copies of the past two financial statements (income statement, balance sheet, attachments, annual report and signature pages), audit reports and list of shareholders. If the financial statements and their appendices have been submitted to the Finnish Patent and Registration Office (Section 3, Paragraph 9 of the Accounting Act (1336/1997)), they need not be separately provided.
Send the application by secure email.
If the loan or interest fall due for payment while the application for a loan amendment is being handled, the State Treasury will send the customer an invoice for these. However, due payments will not be referred for debt recovery before Business Finland makes a decision on the loan amendment. Business Finland will inform the State Treasury that a loan amendment application has been submitted.
It is recommended that interest due is paid to avoid incurring interest for late payment.