Surprisingly few applications for sole entrepreneur support and money left to distribute — SY proposes development vouchers for sole entrepreneurs
Processing of sole entrepreneur support applications has gone well for the most part, with a few exceptions. Applicants have been able to receive their money in as little as a few days, and in a week on average.
Mika Hämeenniemi, Sectoral Manager at Suomen Yrittäjät, says, “There have clearly been fewer applications than expected. However, applications are still open. If they meet the criteria, it is absolutely worth business owners’ while to apply for the support before the end of September.”
A survey conducted by the Association of Finnish Local and Regional Authorities showed that 36,000 sole entrepreneurs had applied for the support by 17 August. Of those, 34,000 had been processed, 29,500 (87%) had been approved and around 3,000 declined. Approximately 1,600 applications were not processed, for example, because they were submitted to the business owner’s home municipality, not the one the business was registered in.
Hämeenniemi says, “There are probably several reasons the number of applications is smaller than expected. Not everyone meets the criteria, some people think the support is too small, the application process may seem complicated, and some people may have an attitude of ‘I’ve never applied for any support and I never will’.”
The requirements for receiving the support include a 30% drop in turnover, being registered for YEL pension insurance or a turnover of at least €20,000. More detailed application criteria are on the Ministry of Economic Affairs and Employment website.
“Some sole entrepreneurs have been doing reasonably well, fortunately, and have not seen their turnover drop by 30%,” Hämeenniemi says.
He says that while there is some regional variation in processing times, the time between application processing and payment has been a week, on average.
“In some municipalities, it’s only taken a few days. However, there have been some delays during the summer holiday season,” Hämeenniemi says.
He reminds entrepreneurs in difficulty about the unemployment benefit for entrepreneurs.
“The labour market support is an important form of help — and it is not a barrier to receiving the sole entrepreneur support.”
Development voucher for sole entrepreneurs?
Official statistics show there are 182,000 sole entrepreneurs in Finland. The government earmarked €250 million for the support aimed at them.
Mika Hämeenniemi says, “Because not all of this money is going to be used, Suomen Yrittäjät proposes extending the application period until the end of the year. SY has also proposed a business development voucher which would be aimed at developing sole entrepreneurs’ operations.”
1.5 months’ wait because of human error
Even the largest city, Helsinki, has managed to deal with the rush of applications well. However, a sole entrepreneur in the graphics sector was forced to wait 1.5 months for the support because of human error.
This entrepreneur applied for the support on 7 July.
“They asked me for further information that same day. The tax debt register statement I had printed out from the Business Information System was not good enough — instead, I needed a document from the Tax Administration,” the entrepreneur says.
This entrepreneur wished to remain anonymous.
“After that day, 7 July, I heard nothing more from the city of Helsinki — no decision, no payment. The system did show that they had received my application,” the entrepreneur says.
“I didn’t ask any more about my application and sometimes even forgot about it, as work was coming in again. Then the Suomen Yrittäjät newsletter reminded me about the support and I contacted SY.”
Suomen Yrittäjät investigated the matter on behalf of the entrepreneur and contacted NewCo Helsinki, the unit in the city of Helsinki responsible for applications for the support.
Toivo Utso, Senior Advisor at NewCo, says, “We are really sorry: what happened here was human error, and, to be frank, the applicant was a victim of the summer holiday season.”
“We’ve received a total of 9,000 applications and got help with processing them from other units in the city of Helsinki. At the start of July, most of that extra help went on summer holiday, including the employee who had been processing this entrepreneur’s application. That employee made a human error. There was an important box left unticked in the electronic application and the application did not move forwards,” Utso says.
“We’re sorry about this. Human error should of course not happen, but the number of applications was large,” Senior Advisor Utso says.
As of Monday 24 August, the city of Helsinki had paid the sole entrepreneur support to 6,300 applicants. At the busiest period, the support was being paid three times a week. Since then, the number of applications has fallen. Support decisions are made every day, but at the moment the city of Helsinki pays the support once a week.
Toivo Utso says, “Over the past four weeks, there have been about 100 applications a week. Now, however, it seems the number of applications is rising. For example, on Monday there were about 50 applications.”
The graphic sector entrepreneur quoted anonymously above says that the sole entrepreneur support is necessary to meet overheads:
“I have to pay rent on my office, my phone bill, the internet, my accountant,” the entrepreneur says.
“April was the hardest month of all because of coronavirus,” the entrepreneur says, echoing a sentiment voiced by many others.
The coronavirus shock hit all sectors of the economy and orders dried up overnight.
“In the first month I did all sorts of things. The most important, however, was that I actively called my clients. The situation has gradually picked up and work has started coming in again,” the entrepreneur says.
“I haven’t applied for the entrepreneur unemployment benefit.”