Public Funding Options

for SME Companies

Successful growth in

international markets

Kimmo Aura

Regional Sales Manager, Americas

Finpro ry

Merinova Wind Seminar, Vaasa

14.2.2013

Content

• Summary of financial models

• Some financial instruments highlighted

• Finpro in brief and how to use public funding for professional

services.

• Case example

2 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

© Finpro

Typical funding needs

• New markets, customers or market channel development

• International business and growth plan

• Market analyzes and defining of value chain

• Raising equity capital

• Funding of the delivery projects and working capital

• Product or service development

• Supply chain development

3 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

© Finpro

Financiers’ view

• Public financier

– National interest – what is benefit for Finland ?

• Increase of employment

• Increase of tax payments

• Increase of currency income

• Public image for Finland

• Development aid financier

– Impact for target country

• Increase of know-how

• Increase of employment at target country

• Increase of export

4 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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Definition of SME status

• This presentation focuses on SME companies (Small and

Medium size Enterprise)

– Definition of SME company (in EU):

– Headcount <250 and

– Turnover <50 M€ or

– Balance sheet total<43M€ and

– Autonomous company, which means that ownership in large company is

less than 25% (for institutional investor the limit is < 50%).

– Link for new definition of SME company in English

5 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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link

Limits for public funding

• Public tendering process

– In general public tendering process is needed, if project value > 30 k€

and public support > 50%

– Public tendering process is done in HILMA-system

• Public procurement law in Finland (Hankintalaki 15 §)

– There is some more detailled tresholds mentioned in public procurement

law (in Finnish or Swedish)

• Company has to be creditworth and financing plan credible

– No open tax invoices, no marks in credit history, positive equity capital

– Link to Public procurement law (in Finnish)

– Link to tendering process (in Finnish) HILMA

6 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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link

Limits for public funding

• De minimis regulation

– (De minimis = support with minimal impact to competition)

– Public (de minimis type) support shall not exceed 200 k€ over any

rolling period of three fiscal years.

– There is limitations to use de minimis support for Fishing industry

or agricultural industry and there is some limits for transportation

industry as well

– It is not allowed to support direct export or sales, however

preparation of export or preparation of partner search is practically

allowed.

– Link to regulation of EC comission regarding De minimis aid

7 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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link

Public funding instruments

20.6.2012 8 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura © Finpro

Preparation funding max. 15 k€/ 70 % support

Project max. value 21400 €

Tekes R&D funding, ca. 20–500 k€ (50 % support) and R&D loan (50-70% of costs)

Tekes De minimis aid max. 100 k€ / 35-50% support

Finnpartnership aid 3 yrs max. 200 k€ / 30–70 % support

Nopef project aid 45 k€ / 50 % support

Finpro Growth Market Program, value ca. 19 k€ ca. 50% support

Finnvera loans , guarantees, export guarantees and venture capital

Development funding ca. 15–100 k€ / 50 % support

Tekes Young Innovative Enterprises 50 k€ + 250 k€ + 750 k€ / 75 % support

Yhteishankintakoulutus ca. 30-130 k€ /70 % support

Finpro export partner group 25–65 % support

Finpro Go Global Plus Program, value ca. 17.5 k€ ca. 75% support

Venture Capital related links

• VIGO accelerators

– Vigo is an accelerator program for dynamic startups. Vigo grows high

quality internationally-focused companies by connecting promising

startups with experienced entrepreneurs and funding. Link for more info.

• Finnish Industry Investment

– Finnish Industry Investment Ltd is a government-owned investment

company. They promote Finnish business, employment and economic

growth through venture capital and private equity investments. Link for

more info.

• Finnfund

– Finnfund (Finnish Fund for Industrial Cooperation Ltd.) is a Finnish

development finance company that provides long-term risk capital for

private projects in developing countries. Link for more info.

• Sitra

– Sitra’s activities promote and stimulate new business models that aim for

sustainable well-being. As a public fund, they report directly to the Finnish

Parliament. Link for more info.

9 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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Venture Capital related links

• Finnvera venture capital investments

– Finnvera's Venture Capital Investments serve as the hub for public early-

stage venture capital investments. Link for more info.

• FIBAN

– FiBAN is a Finnish, non-profit network of private investors that aims to

inspire and increase the amount and quality of private investments made

in early-stage companies. Link for more info.

• Finnish Venture Capital Association (FVCA)

– The goal of FVCA is to develop private equity and venture capital as an

industry and promote the interests of its members in Finland. Link for

more info.

• Business Angels Finland (BAF)

– BAF offers a safe and reliable web-based environment where private

investors, also known as "Business Angels", and capital-seeking

entrepreneurs can meet. Link for more info.

10 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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Venture Capital related links

• Nefco

– NEFCO is an international financial institution established by the five

Nordic countries. NEFCO finances investments and projects primarily in

Russia, Ukraine, Estonia, Latvia, Lithuania and Belarus, in order to

generate positive environmental effects of interest to the Nordic region.

Link for more info.

11 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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Finnvera

18.2.2013

Yrityksen perustaminen

Pienlaina

Naisyrittäjälaina

Pientakaus

Finnvera-takaus

Investointi- ja käyttöpääoma-

laina

Yrittäjälaina

Kasvu ja kehittäminen

Finnvera-takaus

Investointi- ja käyttöpääoma-

laina

Kehittämislaina

Ympäristölaina

Suhdanne-

rahoitus

Kansainvälisty-minen

Kansainvälisty-

mislaina

Kansainvälisty-

mistakaus

Investointitakuu

Vienti

Vientitakaus

Luottoriskitakuu

Ostajaluotto-

takuu

Pankkiriskitakuu

Vastatakuu

Rahoitustakuu

Remburssitakuu

Vientisaatava-

takuu

Raaka-ainetakuu

Omistus-

järjestelyt

Finnvera-takaus

Investointi- ja käyttöpääoma-

laina

Yrittäjälaina

Finnvera offers financing and financing expertise to meet the needs you

might face when planning an enterprise’s internationalisation. Link

Check also

• Yritys-Suomi – Enterprise Finland

– Yritys Suomi - Enterprise Finland is an online service that is available to

its users free of charge. It provides information about the kinds of

assistance available to companies or entrepreneurs for establishing and

developing their business. Link for more info

• Kasvuväylä

– Kasvuväylä ”Growth Track” is a service for companies aiming to grow fast

in international markets. Link for more info (in Finnish)

• Ministry for Foreign Affairs

– The Ministry for Foreign Affairs and the Finnish diplomatic and

consular missions abroad monitor and promote Finland's

economic interests abroad. The geographically wide network of

diplomatic and consular missions abroad, in cooperation with

other EPI actors, provides companies with public services related

to export promotion and internationalisation. Link for more info

13 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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ELY-Center funding options

• Valmistelurahoitus (preparation funding): – Preparation funding helps SMEs to prepare for actual development projects and

to analyze their success potential.

– Development projects outside normal business operations

– Purchasing of expert services, in-house salaries and travel costs

– Link for more info in Finnish

• Yrityksen kehittämisavustus (development funding): – Granted for long-term projects for enhanced business competitiveness. Potential

targets include investments, other development measures, small business start-up measures and salaries of new jobs.

– External expert consultation

– Salaries (de minimis)

– Travel costs (de minimis)

– Fair and exhibition costs (de minimis)

– Link for more info in Finnish

• ELY Center Personnel: – Can be searched from this link.

14 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

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TEKES funding options

• R&D Funding – Tekes will fund part of the project's costs. The greater the novelty value of the

innovation and the longer the period before anticipated commercialisation, the larger

an investment Tekes may provide. Link

• De minimis aid

– Encourages SMEs to new business development:

– To develop new products and services, productization, proof-of-concept, piloting and

acquiring knowledge through networking and cooperation

– Support can be used also for business feasibility studies and studies on new

markets, end user needs and internationalization requirements

– The support can cover SME’s own work and services purchased from outside

service providers

• Young Innovative Enterprises - Nuoret innovatiiviset yritykset

– The maximum funding is one million Euros per enterprise. The funding is granted in

phases. Before that, a company may apply preliminary phase funding for planning

the growth activities. Link

• Test your idea or contact

– Test your idea here and find best contact person here

15 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

© Finpro

Nopef project support

• Nopef - Nordic Project Fund

– Nopef may participate with up to 40% of the approved

feasibility study costs in connection with international

business set up.

– The loan can be fully or partially converted into a grant, after

the final project report has been approved.

– Nopef target countries and industries in this link.

16 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

© Finpro

Finpro

• Finpro Growth Market Program – Finpro Growth Market Program is an internalization program into growing markets. The program is

targeted for Finnish SMEs. Finpro Growth Market Program supports both fast growth and managed growth companies in building a systematic business in growing markets. Link for more info

• Finpro Go Global Plus Program – Go Global Plus is a training program for Finnish SMEs that want to develop their

internationalization skills and seek for growth from new markets. Go Global Plus trains companies' shareholders, management and persons responsible for marketing and export. The goal is to give participants a practical ensemble of skills and know-how to support management and development of international operations and find the right international opportunities. Programs target markets are for example North-American, European, Russian and Middle Eastern markets. Go Global Plus funded by ELY-center with European Social Fund (ESF) funding. Link for more info.

• Finpro Export Partner Groups – Start exporting quickly with the help of a skillful export manager who has local knowledge, and split

your internationalisation risks with other companies - benefit by having access to local know-how, reducing your risk. Link for more info

17 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura

© Finpro

Finnpartnership support

• Business Partnership Support Facility

– The purpose of Business Partnership Support is to

encourage commercial cooperation between Finnish companies and companies and organisations in developing countries.

– Business Partnership Support is financial support for the planning, development and training phases of projects aiming at establishing commercial activity in developing countries, or starting value-added import from developing countries. The support can be granted to Finnish companies and other organisations for commercially viable, long-term activities aimed at economic cooperation in developing countries. Link to check the target country support.

18 Public funding sources / Kimmo Aura © Finpro 2.2.2010

Finpro in Brief

• Finpro is a globally operating expert organization which helps Finnish companies to international success.

• Today Finpro has 370 professionals who work in 68 offices in almost 50 countries.

• Finpro’s consultants completed 1658 assignments in 2011.

• Finpro’s service offering is a unique combination of strong industry sector and target market knowledge, foresight and expertise in the internationalization process.

18/02/2013 © Finpro 19

Finpro was founded by Finnish companies in 1919. Today the Association has 550 members: Finnish

companies, the Confederation of Finnish Industries, the Federation of Finnish Enterprises and the

Federation of Finnish Technology Industries. Finpro as a public-private partner belongs to the Ministry of

Employment and the Economy Group and works closely with other operators in Finnish innovation

ecosystem such as ELY-centers, Tekes and Ministry for Foreign Affairs.

Finpro’s Global Network

18/02/2013 20 © Finpro

Acquisition

Candidate Search

Market Monitor

Sales Accelerator Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development Direct Sales

Establishing

Company

Supplier Evaluation

Export Partner

Groups

Trend Pulse

Improving the

Market Position

Establishing the

Presence

Finpro Navigator

Planning the

Market Entry

Preparing the

Growth

Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development

Improving the

Market Position

Establishing the

Presence

Typical financing path for SME company growing

to international markets (Proof of Concept)

Planning The

Market Entry

Preparing the

Growth

Phase 1 Preparation funding (ELY)

Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development

Improving the

Market Position

Establishing the

Presence

Typical financing path for SME company growing

to international markets (Proof of Concept)

Planning The

Market Entry

Preparing the

Growth

Phase 1 Preparation funding (ELY)

Phase 2 Development funding (ELY)

Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development

Improving the

Market Position

Establishing the

Presence

Typical financing path for SME company growing

to international markets (Proof of Concept)

Planning The

Market Entry

Preparing the

Growth

Phase 1 Preparation funding (ELY)

Phase 2 Development funding (ELY)

Phase 3 Development funding (ELY) for countries defined in phase 2

Entry Options Partner Search International

Growth Plan

Test Drive

Right Markets

Sales Channel

Development

Improving the

Market Position

Establishing the

Presence

Typical financing path for SME company growing

to international markets (Proof of Concept)

Planning The

Market Entry

Preparing the

Growth

Phase 1 Preparation funding (ELY)

Phase 2 Development funding (ELY)

Phase 3 Development funding (ELY) for countries defined in phase 2

Alternatively phases 1-3 Tekes De minimis aid or NIY phase 0 or Finnpartnership aid

A company from the north of

Finland with some 30 employees

set up a branch office in France

and made a million-euro deal

with a world-famous aircraft

manufacturer.

We appreciate Finpro’s strong

expertise and extensive network,

which gives us wider perspective

to make decisions.

Cooperation has been very

uncomplicated, and we always got

help when we needed. According

to my experience we have made a

very good choice, and cooperation

will continue at least by the same

intensity as it has been so far.

In addition to overall sparring in

internationalization, we got

valuable support from Finpro in

many practicalities. In international

negotiations the investments are

big and details complicated.

Pekka Hosio, Managing Director,

Champion Door Ltd

A company from the north of

Finland with some 30 employees

set up a branch office in France

and made a million-euro deal

with a world-famous aircraft

manufacturer.

We appreciate Finpro’s strong

expertise and extensive network,

which gives us wider perspective

to make decisions.

Cooperation has been very

uncomplicated, and we always got

help when we needed. According

to my experience we have made a

very good choice, and cooperation

will continue at least by the same

intensity as it has been so far.

In addition to overall sparring in

internationalization, we got

valuable support from Finpro in

many practicalities. In international

negotiations the investments are

big and details complicated.

Pekka Hosio, Managing Director,

Champion Door Ltd

A company from the north of

Finland with some 30 employees

set up a branch office in France

and made a million-euro deal

with a world-famous aircraft

manufacturer.

We appreciate Finpro’s strong

expertise and extensive network,

which gives us wider perspective

to make decisions.

Cooperation has been very

uncomplicated, and we always got

help when we needed. According

to my experience we have made a

very good choice, and cooperation

will continue at least by the same

intensity as it has been so far.

In addition to overall sparring in

internationalization, we got

valuable support from Finpro in

many practicalities. In international

negotiations the investments are

big and details complicated.

Pekka Hosio, Managing Director,

Champion Door Ltd

A company from the north of

Finland with some 30 employees

set up a branch office in France

and made a million-euro deal

with a world-famous aircraft

manufacturer.

We appreciate Finpro’s strong

expertise and extensive network,

which gives us wider perspective

to make decisions.

Cooperation has been very

uncomplicated, and we always got

help when we needed. According

to my experience we have made a

very good choice, and cooperation

will continue at least by the same

intensity as it has been so far.

In addition to overall sparring in

internationalization, we got

valuable support from Finpro in

many practicalities. In international

negotiations the investments are

big and details complicated.

Pekka Hosio, Managing Director,

Champion Door Ltd

Champion Door Ltd. was established in 1974. Company is one of the leading manufacturers of large industrial doors in Finland, e.g. fire doors, smoke curtains, and other large scale doors for aircraft hangars, harbors, and energy store-houses etc. Internationalization of Champion Door started in 1990’s, when the company made first deals to Russia and later to some European countries.

Champion Door needed help in defining the strategy

and developing their international business plan, which

included a more focused product portfolio and market

selection.

Champion Door Ltd. was established in 1974. Company is one of the leading manufacturers of large industrial doors in Finland, e.g. fire doors, smoke curtains, and other large scale doors for aircraft hangars, harbors, and energy store-houses etc. Internationalization of Champion Door started in 1990’s, when the company made first deals to Russia and later to some European countries.

Champion Door needed help in defining the strategy

and developing their international business plan, which

included a more focused product portfolio and market

selection.

Finpro supported Champion Door in making the

strategic choice to focus abroad with one product line,

aircraft hangars. Company decided to target the

operations to Central Europe and especially to France,

where the greatest potential was recognized. At first

Finpro made a market study which was later deepened

by more detailed customer research. As a result EADS

group was defined as the most potential client.

With the help of Finpro, Champion Door has created

important contacts and tackled culture differences in

different markets. Three years ago its international

sales was 25%, now export brings in 75% of the

turnover. Its greatest achievement so far is the

EADS/Airbus deal worth over 10 million Euros in the

next three years.

Thank You !

More info:

Kimmo Aura

Regional Sales Manager, Americas

Kimmo.aura@finpro.fi

+358 40 504 8317

18/02/2013 35 © Finpro