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Business owner waiting for government subsidy pay-out for half a year

The development of an innovation by business owner Kristian Stenman is stalled because of slow processing by the ELY Centre.

A single-person business owner who has operated in the cooling and heating equipment industry for over 20 years is tired of waiting for a subsidy decision by the ELY Centre.

The Suomen Kylmäpiste Oy company was awarded a de minimis (low level) subsidy last September, seven months after its owner had applied for it in February 2023.

Since the start of March 2024, Kristian Stenman has been waiting for the subsidy to be paid, and continues to do so.

“The process has moved on to the extent that it is now in the processing phase. If the preliminary signs are true and everything goes well, it will be 2–4 weeks before the subsidy goes into payment.”

Suomen Kylmäpiste Oy is receiving the subsidy for development of a new product. The product is called Coolcode, a registered trademark. It is an electronic service book for which the company has also applied for use pattern protection.

Significant brake on product development

The ELY Centre has not told Stenman the cause of the delays. The slow processing has significantly delayed product development.

“I could have hired someone by now. Since the subsidy hasn’t been paid, I can’t hire anyone and the project is at a standstill.”

Outside investors have also been involved in the project.

“They are ready to invest in operations as soon as the subsidy is paid.”

Stenman has been awarded a de minimis subsidy of €50,000. He says that the amount is significant for a small company.

“I’ve invested all the company’s available assets in product development, as well as investing a significant sum in the project personally. I’ve tried to keep the company going through cash flow, which detracts from product development. That’s another reason getting the subsidy quickly would be important.”

Stenman has a clear message for government agencies.

“I’d like to see matters processed more quickly. When a subsidy decision has been made, it should be paid rapidly. The ELY Centre is processing an awarded decision that I have already submitted all the documents for.”

“Organizational shake-up could hurt customer service”

Harri Jaskari, a Vice President at Suomen Yrittäjät, the Finnish SME association, is stunned by the business owner’s situation.

“The ELY Centres should examine their own actions. The public sector in Finland should be able to serve companies better than it does at present. What’s shocking is that the support has already been awarded, but it takes months to pay it.”

A statutorily binding deadline is being planned for processing and payment times in planning and permit matters. Jaskari proposes the same for business subsidy matters. At the same time, government agencies should be obliged to compensate for costs arising from delays.

He says that the risk is that centralizing the services of the ELY Centres in the new vitality centres will lower the level of customer service.

“In this reorganization, it’s extremely important to focus on the speed and efficiency of customer service. However, the fear is that the shake-up will paralyse the service capacity of the new organization for several years. This paralysis must be avoided..”

We have previously reported on a metalworking company that has also waited a long time for an ELY Centre subsidy. The business owner said he had had issues with the payment of structural fund subsidies for a long time.

The background to the slow pay-outs is a data system, the deployment of which has experienced severe delays. The problem began in November 2021, when the new EURA 2021 data system, ordered by the Ministry of Employment and the Economy, was supposed to be launched. It is used to apply for and award development and investment assistance for companies, among other recipients.

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Pauli Reinikainen