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Initial funding requires work – plan your application well

Initial funding (Fin.: starttiraha), intended for new entrepreneurs, helps you financially survive the early phase of entrepreneurship. To obtain funding you must have a good business plan.

A new entrepreneur can receive initial funding for the first 6–12 months of business operations (€32.40/day, paid for max. five days a week). Initial funding is intended to support the entrepreneur’s livelihood.

Intitial funding is personal, taxable income. The tax rate for initial funding is calculated according to a specific percentage, which is calculated on the basis of the necessary information you supply to the Tax Administration. This means you must supply an amended tax card intended for the payment of a benefit. If you do not supply a tax card, tax will be deducted from the initial funding at source using the percentage set for salary or 25%, whichever is lower. If you supply a tax card, you will pay tax at your normal tax rate.

Read more at www.vero.fi.

Read about how to obtain initial funding below. It might all sound like a lot of effort at first, but starting out as an entrepreneur does require hard work. Each step is important for the success of your business operations.

To obtain initial funding, you must:

  • Write a good, careful business plan with a realistic budget.
  • Via the “Oma asiointi” service, send the TE office a finance plan and any finance offer or promise (if external funding is necessary to begin your operations). In addition, the TE office will want to see profitability and sales calculations.
  • Provide the TE office with a tax debt statement.
  • Do not start business operations until you have received initial funding. Check with the TE office in advance what actions are considered “starting business operations”.
  • Become a full-time entrepreneur. You can also be an entrepreneur alongside other work if you are expanding your activities to make them your full-time occupation.
  • Show that you understand what entrepreneurship is. You can do this by attending an entrepreneurship course or showing, on the basis of prior entrepreneurship studies or experience, that you already know enough. You can ask your local TE office about entrepreneurship courses.
  • Complete the application yourself. You can fill out the application in the TE office’s “Oma asiointi” service or on a printable form available on the TE office website. Check with your local TE office whether you need to visit them in person.

Initial funding is awarded on a discretionary basis, so positive and negative decisions may vary. When funding is granted, things such as the competitive situation and the need for new business operations in the area are considered.

What do you need to do?

When you plan to set up a company and apply for initial funding, first contact the TE office. They will refer you to a business adviser and can give you tips about any entrepreneurship course you might need and how to proceed with your application and founding your business.

Prepare all the materials mentioned above (business plan, finance plan and any offer of finance) carefully for the application.

Make enough time for the process! For example, the entrepreneurship courses that are often required to obtain funding may last from a week to three months, and fine-tuning your business plan and calculating finances also takes time.

When writing your business plan, the Finnish Enterprise Agencies can also help you. Often, the local TE office that makes the decision on initial funding may ask for a statement from a third-party consultant or a Finnish Enterprise Agency when considering whether to grant funding. Cooperating with a Finnish Enterprise Agency is sensible from the perspective of obtaining funding. It means you can avoid pitfalls at the business plan stage and that your business operations are well-prepared – or then that conditions are not suitable for your business – in which case, case closed.

If this is making you anxious, remember that you don’t have to think about all this alone. The Finnish Enterprise Agencies and TE offices, in particular, offer personal help and advice.