Subordinated product development loans

The maximum loan period for a subordinated capital loan (for R&D and for establishing a new business) is 10 years. The first five years can be a period of grace before repayment of the principal begins.

The loan period begins from the drawing of the first part of the loan. The actual loan period will be longer than stated, since the maturity date is tied to the end of the borrower’s financial year and not to the date on which the first part of the loan is drawn.

The interest rate of a R&D loan is one percentage point below the base rate of interest; notwithstanding this, the minimum rate is 3.0 per cent. The interest is payable as of the date on which the loan or a part of it is first drawn. The interest calculation period is the financial year.

The interest rate of a loan for establishing a new business is the base rate valid at any given time, however, always at least four per cent.

Loans granted during the validity of the Limited Liability Companies Act (734/1978)

The loan recipient will only pay interest on the loan capital if the institution that has raised the loan has an equivalent amount of distributable assets. However, interest on the loan will also accumulate during the review periods in which the confirmable financial statements show no distributable assets

The borrower shall repay any of the capital only if full cover remains for the restricted equity of the institution taking out the loan.

Loans granted during the validity of the new Limited Liability Companies Act (624/2006)

The borrower shall repay the interest and capital only in so far as the amount of free equity and all the capital loans of the institution taking out the loan exceed at the payment time the amount of loss verified for the company’s latest full financial period or included in a more recent financial statement in accordance with the balance sheet.

If part or all of the principal or interest on a capital R&D loan has not been repaid by the end of the loan period for the above reasons, the loan period will be prolonged until the entire loan has been paid back.

Capital loans are in principle granted without the requirement of collateral.

The loan terms are described in more detail in a loan note prepared by the State Treasury. A copy of the loan note template can be requested by e-mail from yritysluotot(at)statetreasury.fi.

Once Business Finland has made a decision on granting a loan, the State Treasury will send the applicant instructions on how to take out the loan.

Signing the loan note

First, the borrower must book an appointment for signing the loan note at the State Treasury. Appointments can be booked by calling +358 295 50 2530 between 10 a.m. and 3 p.m. Monday to Friday.

Alternatively, you can sign the loan note at a Notary Public at a register office. However, you should first contact the State Treasury in order to allow us to send you the loan note via mail for signing. The original loan note, signed at the Notary Public, along with its appendices must be returned by post to the State Treasury.

Supplying information

In addition to the signed loan note, the borrower must provide the State Treasury with the following information:

• an original or electronic extract from the trade register that is no more than three months old
• a certified extract or certified copy of the minutes of the company’s Board meeting at which the decision to take out a loan was made
• name and contact details of the person managing issues related to the loan (address, telephone numbers and e-mail address)
• invoicing address.

Loan payment

The State Treasury shall pay the first instalment of the loan as an advance after the loan note has been signed in the State Treasury or at a Notary Public and all the necessary documents have been supplied to the State Treasury.

The borrower must report on the progress of the project to Business Finland, who will then decide on paying the following instalments based on these interim reports and inform the State Treasury of the amount to be paid. The State Treasury will pay the amount specified in the decision to the borrower.

Change of account number

You must inform Business Finland of any changes to your account number. You can make the notification by using the form ‘Approval of Funding Decision, Business R&D Funding’.

For each year of a R&D loan, the State Treasury will request payment of the annual interest and the year’s repayment instalment on the principal on the date on which the first part of the loan was drawn.

For capital R&D loans, it is the duty of the company’s auditors to establish whether the balance sheet presented to the Annual General Meeting for approval allows interest or repayment instalment to be paid that particular year in accordance with the conditions of the loan agreement. This is determined in connection with the regular annual audit.

In the case of a capital R&D loan, the interest and repayment instalment must be paid within 45 days of the date on which the Annual General Meeting confirmed the amount of interest and the repayment instalment. After receiving the invoice, the State Treasury sends the above-mentioned auditor’s report and other necessary financial statement documents.

If it has not been possible to pay the interest on a capital R&D loan according to the payment schedule, the outstanding interest will be carried over to forthcoming financial years until the interest is paid in full.

If your project is delayed, it fails or its results cannot be used in business operations, you can request Business Finland to amend the loan terms.

The primary solution in these cases is to offer the debtor an extension to the repayment period, but in some cases the unpaid principal and interests can be converted completely or partially into a grant.

Loan terms may only be changed on application by the debtor. Applications must be submitted in good time before the next installment is due so that Business Finland can take the upcoming installments into consideration when making its decision on changes in loan terms. If the application is submitted after an installment has fallen due, the debtor has to pay the overdue installments according to the original loan terms. Instructions for applying for an amendment to loan terms can be found on Business Finland’s website.

Business Finland must be notified in writing of any corporate restructuring (mergers, divisions, etc.) and substantial changes in ownership. Business Finland shall notify the State Treasury whether it will support or oppose the proposed business reorganisation.

The company may not assign the project to a third party without permission from Business Finland. If the company intends to sell the business of which the project is a part, Business Finland must be notified of the sale in writing well in advance. If Business Finland grants permission for the transfer, the new borrower must book an appointment for signing the transfer agreement at the State Treasury. Appointments can be booked by calling 0295 50 2530 between 10 a.m. to 12 p.m. and 1 p.m. to 3 p.m. Monday to Friday.

Alternatively, you can sign the transfer agreement at a Notary Public at a register office. However, you should first contact the State Treasury in order to allow us to send you the transfer agreement via mail for signing. The original agreement, signed at the Notary Public, along with its appendices must be returned by post to the State Treasury.

Business Finland is entitled to cancel a funding decision if the sale would lead to a situation where the continuation of the project can no longer be considered reasonable. After receiving a cancellation decision, the State Treasury will recover all loans.

Pääomaehtoisen tuotekehityslainan saajan tulee vuosittain toimittaa Valtiokonttorille tuloslaskelma ja tase, tilintarkastuskertomus, yhtiökokouksen pöytäkirja sekä KHT/HTM-tasoisen tilintarkastajan allekirjoittama ilmoitus siitä, voidaanko pääomalainalle maksaa korkoa tai lyhentää pääomaa.

The information must be submitted within two weeks of the Annual General Meeting in which the financial statements were approved.

Any change in the dates of the financial year must be reported to the State Treasury immediately.

Any transfer of shareholders’ equity into restricted equity always requires permission from the State Treasury.

The information can be submitted by email to yritysluotot(at)statetreasury.fi or by post to State Treasury/FInance/Company loans, PO Box 14, 00054 Valtiokonttori, Finland.

Loan customers can check their loan statements and plans in the e-service for loan customers.

The customer may also choose to give access rights to its accounting firm so that the firm can retrieve loan statements for the financial statement from the e-service.