Financing

You need capital to start a business and your need for financing can vary depending on the scope or type of the business venture, whether new investment is needed and/or the type of premises needed. Sources of capital can include internal financing (the entrepreneur’s own investment in the business) or external financing.

External financing is primarily composed of loans. Business loans can be sought from commercial banks or the Finnish state-owned Finnvera. Finnvera also provides guarantees as collateral for credits received from banks, insurance companies or other lenders and for other bond guarantees, such as delivery collateral. Short-term financing options can include various leasing arrangements, as well as credit and/or equity advancement or credit cards.

There are also other various forms of funding, such as grants. Grants are normally means-tested and require a business venture to be financially viable. When putting together a business idea, it is important to remember that a business cannot be solely dependent on external financing or grants but should instead demonstrate profitability without any external support. The Center for Economic Development, Transport and Environment (ELY-keskus) and Business Finland both provide various types of grants to businesses. TE-services grant salary support and startup grants.