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RDI loans in disruptive circumstances

The temporary research, development, and innovation loan is intended for SMEs and midcap-companies employing at least six people and operating in Finland and for foundations and associations doing significant business. Eligible for funding are those companies, foundations and associations that are through development seeking new means of coping with the disruptive circumstances in their businesses. By investing in development, applicants wish to improve their operating conditions and renew their businesses in order to be competitive in and after the covid-19 crisis.

Companies can apply temporary loan funding until 14th of May 2021. (NOTE: The application period has been extended.) Project implementation may continue also after the deadline for applications. 

Business Finland's financial authorization for this funding service is a maximum of EUR 300 million.

When assessing the impact of funding, especially the employment effects of funding in Finnish society will be evaluated.  

Who is eligible for funding?

The funding is intended for limited liability (private and publicly listed) SMEs and mid-cap companies who are operating in international or domestic markets and whose businesses have been affected by the covid-19 pandemic. Foundations and associations with significant business may also apply for funding if their business has been affected by the covid-19. The applicant must be able to show Business Finland how the covid-19 crisis has hampered its business or what kind of a threat the crisis poses and how the applicant is trying to solve these challenges through development measures.

The aim of the funding is to help SMEs and midcap companies to maintain their R&D activities even in the event of disruption and to develop solutions that create a new competitive advantage after the crisis. With Business Finland's funding, applicants can direct the resources released as a result of an exceptional situation to development work and accelerate development. This will allow them to keep their staff employed during the crisis.

The funding may be used for two types of RDI projects:

1. For companies, foundations and associations operating in the Finnish and/or international market whose business has been impacted by covid-19 and which have identified clear development needs in their business operations as the result of the exceptional circumstances caused by covid-19.

  • Beneficiaries can use the RDI funding to search for new means of coping with the disruptive circumstances in its business and to improve operating conditions and renew business in order to remain competitive after the covid-19 crisis.
  • The funded RDI project must attempt to directly solve a disruptive situation or business threat caused by covid-19.
  • Only costs on research, development and innovation are eligible.
  • The developed solution must offer competitive advantage at least in the Finnish market. Describe in the application within your own sector or in comparison with your competitors, what new or enhanced products, business processes, practices or services will be created as a result of this project.
  • The level of funding is generally 70%, and the maximum amount that may be granted is EUR 500,000.
  • In most cases, the so-called EUR 800,000 Temporary State Aid Framework of the European Commission applies to the funding; under it, a maximum of EUR 800,000 of support per company in total can be granted for an individual company (in the whole group or in the same control). The support of all public funders that use the Temporary Framework in question is included in the sum. For example, if the company has received support for business costs, this will be taken into account in the amount of the RDI loan granted by Business Finland, and the total sum may not exceed EUR 800,000. In contrast, de minimis support, of which the company can receive a maximum of EUR 200,000 over a period of three years, is not included in the EUR 800,000 Temporary State Aid Framework. If a company has received funding in disruptive circumstances granted by Business Finland and the ELY Centres, it will not reduce the quota of EUR 800,000; instead, the funding is included in the company's de minimis quota. The funding may also be granted on the basis of General Block Exemption Regulation if the company's accumulated quota of EUR 800,000 of Temporary State Aid has been reached.

2. For companies seeking international growth whose business has been impacted by covid-19 and that want to invest in research, development and innovation (RDI) activities during the exceptional circumstances in order to improve international competitiveness and the prerequisites for international growth.

  • In projects by companies, foundations and associations seeking international growth, Business Finland follows the so-called standard criteria for RDI funding. This means that developed solutions must seek a competitive advantage in at least the specified international markets.
  • Only costs on research, development and innovation are eligible.
  • The content of the funded project does not necessarily need to directly relate to solving the disruptive situation caused by covid-19, but applicants must demonstrate to Business Finland the negative impact or business threat caused by the crisis on business operations.
  • Standard funding level is 50%. No upper limit of the amount of granted funding.
  • Funding is generally approved on the basis of the General Block Exemption Regulation.

 In the service business, funding is targeted mainly at the so-called labor-intensive sectors. Typically, the business of a labor-intensive company does not require substantial tangible investments and the labor costs account for a large proportion of the company's expenditure. A labor-intensive company requires significant human resources for customer interactions. Due to the nature of the activity and for this reason, productivity growth in labor-intensive sectors is often slow, too. Prior to the covid-19 crisis, various solutions related to automation, digitalization, or time and place independence of service production have been less utilized or identified in labor-intensive businesses than in less labor-dependent sectors. A lot of human resources are needed for customer encounters, and in a crisis like the covid-19, companies have to consider how, for example, experiences, meanings, experiences and benefits can be produced for the customer in new ways.

The funding is intended in particular for companies, foundations and associations in the following sectors:

  • Commerce
  • Logistics
  • Hospitality
  • Tourism
  • Social and health services
  • Temporary staffing services
  • Software
  • Manufacturing industries

Eligible organizations must be of such a size that they are able to implement a development project worth at least EUR 150,000 and, eventually, repay the loan from business earnings.

Who is the funding not intended for?

  • General partnerships and limited partnerships
  • Large corporations (excluding mid-caps)
  • Registered sole traders and companies employing 1-5 people
  • Agricultural companies in primary production
  • Private entrepreneurs (commercial names) that Business Finland cannot finance according to legislation
  •  Companies that were classed as 'undertaking in difficulty' as per the EU definition on 31 December 2019. With the amendment of the decree at the start of July 2020, companies that became 'undertakings in difficulty' between 1 January and 30 June 2021 can nevertheless apply for a temporary RDI loan. Business Finland uses overall consideration when assessing the application, and it assesses how the company's overall financial situation affects its ability to conduct a profitable business.

How much funding can you get?

The minimum loan for businesses in disruptive circumstances is EUR 100,000. The amount of the loan for a company, a foundation or an association operating in the domestic market may not exceed EUR 500,000, and the maximum amount of funding for projects of companies, foundations and associations seeking international growth will be assessed according to their needs.

Business Finland's loan covers 50-70% of the approved project costs, depending on the project type as described above. The company must cover 30-50 % of the costs through its own finances. The applicant must be able to prove to Business Finland that it has sufficient funds for the whole duration of the project. As Business Finland's funding is generally paid retrospectively, the funding receiver must first be able to pay the costs arising from the project itself.

The term of the loan is generally 7-10 years.

In general, it is possible to have three years during which no principal is repaid. In the case of loans to companies seeking international growth, the loan period is the same as in Business Finland's normal RDI funding.

At the beginning of the project, 30% of the loan can be granted for the project in advance. The rest of the funding is paid on the basis of the actual costs.

Loans are unsecured, so no collateral is required. If the project is delayed, fails, or produces results that cannot be used in business operations, you can ask Business Finland to amend the loan terms. Primarily, the recipient is offered more time to repay the loan. In some cases, the unpaid principal and interest on the loan can be converted to a grant in whole or in part. In other words, the loan does not need to be repaid. Read more about Business Finland´s loan funding and  loan amendments.  

What can the funding be used for?

The following are examples of how the company, foundation or association may use the funding:

  • Modernizing its existing offering and operating methods
  • Developing new solutions for its sector 
  • Piloting and experimenting solutions in the actual operational environment and/or together with customers

Funded projects give rise to solutions that enable the organization to operate profitably and sustainably after the covid-19 crisis. The funded solutions should have significant employment impact in Finnish society.

Eligible costs

The content and goals of a project determine which costs are eligible. Costs can be approved from the date when the application was sent to Business Finland.

Eligible costs are expenditure on research, development and innovation, which is

  • incurred during the life of the project (accrual basis)
  • in the beneficiary's accounts
  • net and excluding VAT.

The salaries of the company's own personnel can be approved as costs in proportion to the amount of work done on the project, as well as the associated indirect personnel costs, overheads, and the services, machinery, and goods purchased in relation to the project. For a more precise breakdown of the eligible costs, see the terms and conditions of funding for companies' research and development projects.

What may the funding not be used for?

The funding may not be used for a project for which the company has received development funding for disruptive business circumstances in grant form from Business Finland. However, a company that has received a grant may apply for temporary RDI loan funding to continue the development work (such as piloting or product development) that began on the grant project. Loan funding may also be granted alongside development funding in disruptive circumstances, but in such cases, the actions must concern different targets than the grant project.

Due to EU rules on state aid and other national restrictions, the funding cannot be used for:

  • Compensation for losses caused by the covid -19
  • Operational production costs, training costs for personnel, or sales and marketing  

How to apply and report 

Applying for funding

  1. Register as a Business Finland Online Service user. You do not need to apply to be your organization's primary user when you register for the service.
  2. Apply for funding via the Online Service. Select a funding service  "Temporary RDI loan for domestic companies in disruptive circumstances" or "Temporary RDI loan for companies seeking international growth in disruptive circumstances".

How to amend your application

You can amend/edit your application via the Online Services, so long at its current status is 'Under review'. You will not receive any separate notifications of the amendment of your application's status, but you can monitor it in the Online Service. Do not send your application again by email, even if the status does not immediately change to 'in progress' in the application service.

You can cancel your application by contacting the record office. Applications cannot be canceled in the Online Service. Your message must include the application reference number and your  organization's name.

What do I do if my funding application is approved?

  1. Read the funding decision and the funding terms and conditions carefully and accept the decision in the Online Service. The funding decision will take effect when the funding decision is accepted.
  2. Organize your project accounting according to the funding terms and conditions from the very beginning of the project. Read the instructions on the Starting a project page.
  3. Implement the project and report on the project implementation and results in accordance with the funding decision and the funding terms and conditions. You can find the reporting periods for your project in your funding decision notification, which is available in the Online Service.
  4. Read the reporting instructions on the Reporting page.
  5. Submit your reports in the Online Service.

What is meant by a SME and midcap?

SMEs are companies with fewer than 250 employees and a turnover of no more than EUR 50 million or a balance sheet total of no more than EUR 43 million. Companies larger than this are classed as large corporations.

Large companies with a turnover of up to EUR 300 million per the latest confirmed financial statements are referred to as midcap companies. Turnover is assessed at the consolidated group level.

Please note: Companies classed as large companies in terms of turnover but which are owned by public entities are never considered midcap companies.

The share of ownership of capital investors and other holdings are not taken into consideration in assessing whether the turnover limit of EUR 300 million is exceeded at the group level.

Questions and answers

The most common questions about funding. Please read these before submitting your application!

Project plan guideline

Please attach a project plan to the application. Make a plan by answering these questions.

How to apply for funding

  1. Familiarize yourself with the guidance provided on this page.
  2. View the application questions and apply for funding in the Online Service.
  3. Business Finland will process your application before sending you a funding decision.

Business Finland´s funding terms and conditions

How to report on the conclusion of your project

  1. Please read the reporting guidelines when you have received your funding decision.
  2. When the project has been concluded, file a report in the Online Service.


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