Public funding options for sme companies

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Finpro presentation material in Wind Power Opportunities in Latin America seminar, Vaasa 14.02.2013

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Public funding options for sme companies

  1. 1. Public Funding Optionsfor SME CompaniesSuccessful growth ininternational marketsKimmo AuraRegional Sales Manager, AmericasFinpro ryMerinova Wind Seminar, Vaasa14.2.2013
  2. 2. Content• Summary of financial models• Some financial instruments highlighted• Finpro in brief and how to use public funding for professional services.• Case example Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 2 © Finpro
  3. 3. 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 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 3 © Finpro
  4. 4. 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 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 4 © Finpro
  5. 5. 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 – Link for new definition of SME company in English Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 5 © Finpro
  6. 6. 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 – Link to Public procurement law (in Finnish) – Link to tendering process (in Finnish) HILMA Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 6 © Finpro
  7. 7. 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 – Link to regulation of EC comission regarding De minimis aid Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 7 © Finpro
  8. 8. Public funding instruments Preparation funding Yhteishankintakoulutus max. 15 k€/ 70 % support Development funding ca. 30-130 k€ /70 % ca. 15–100 k€ / 50 % support 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 Tekes Young Innovative Enterprises 50 k€ + 250 k€ + 750 k€ / 75 % support Finpro Growth Market Program, value ca. 19 k€ ca. 50% support Finpro Go Global Plus Program, value ca. 17.5 k€ ca. 75% support Finpro export partner group 25–65 % support Finnpartnership aid 3 yrs max. 200 k€ / 30–70 % support Nopef project aid 45 k€ / 50 % support Finnvera loans , guarantees, export guarantees and venture capital20.6.2012 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura © Finpro 8
  9. 9. 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. Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 9 © Finpro
  10. 10. Venture Capital related links• Finnvera venture capital investments – Finnveras 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. Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 10 © Finpro
  11. 11. 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. Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 11 © Finpro
  12. 12. Finnvera Finnvera offers financing and financing expertise to meet the needs you might face when planning an enterprise’s internationalisation. Link Yrityksen Kasvu ja Kansainvälisty- Omistus- Vientiperustaminen kehittäminen minen järjestelyt Pienlaina Vientitakaus Finnvera-takaus Kansainvälisty- mislaina Luottoriskitakuu Finnvera-takausNaisyrittäjälaina Investointi- ja Ostajaluotto- käyttöpääoma- takuu laina Pankkiriskitakuu Pientakaus Kansainvälisty- Investointi- ja Kehittämislaina Vastatakuu käyttöpääoma- mistakaus lainaFinnvera-takaus Rahoitustakuu Investointi- ja Ympäristölaina Remburssitakuukäyttöpääoma- laina Vientisaatava- Investointitakuu Yrittäjälaina Suhdanne- takuu 18.2.2013 Yrittäjälaina rahoitus Raaka-ainetakuu
  13. 13. 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 Finlands 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 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 13 © Finpro
  14. 14. 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. Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 14 © Finpro
  15. 15. TEKES funding options• R&D Funding – Tekes will fund part of the projects 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 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 15 © Finpro
  16. 16. 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. Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 16 © Finpro
  17. 17. 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 Julkisen rahoituksen vaihtoehtoja / Kimmo Aura 17 © Finpro
  18. 18. 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.2.2.2010 Public funding sources / Kimmo Aura © Finpro 18
  19. 19. 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. 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.18/02/2013 © Finpro 19
  20. 20. Finpro’s Global Network18/02/2013 © Finpro 20
  21. 21. Finpro NavigatorPreparing the Planning the Establishing the Improving theGrowth Market Entry Presence Market PositionInternational Entry Options Partner Search Sales AcceleratorGrowth PlanTest Drive Sales Channel Direct Sales Market Monitor DevelopmentRight Markets Establishing Acquisition Company Candidate Search Supplier Evaluation Trend Pulse Export Partner Groups
  22. 22. Typical financing path for SME company growing to international markets (Proof of Concept) Preparing the Planning The Establishing the Improving the Growth Market Entry Presence Market Position International Entry Options Partner Search Growth Plan Sales ChannelTest Drive Development Right MarketsPhase 1 Preparation funding (ELY)
  23. 23. Typical financing path for SME company growing to international markets (Proof of Concept) Preparing the Planning The Establishing the Improving the Growth Market Entry Presence Market Position International Entry Options Partner Search Growth Plan Sales ChannelTest Drive Development Right MarketsPhase 1 Preparation funding (ELY)Phase 2 Development funding (ELY)
  24. 24. Typical financing path for SME company growing to international markets (Proof of Concept) Preparing the Planning The Establishing the Improving the Growth Market Entry Presence Market Position International Entry Options Partner Search Growth Plan Sales ChannelTest Drive Development Right MarketsPhase 1 Preparation funding (ELY)Phase 2 Development funding (ELY)Phase 3 Development funding (ELY) for countries defined in phase 2
  25. 25. Typical financing path for SME company growing to international markets (Proof of Concept) Preparing the Planning The Establishing the Improving the Growth Market Entry Presence Market Position International Entry Options Partner Search Growth Plan Sales ChannelTest Drive Development Right MarketsPhase 1 Preparation funding (ELY)Phase 2 Development funding (ELY)Phase 3 Development funding (ELY) for countries defined in phase 2Alternatively phases 1-3 Tekes De minimis aid or NIY phase 0 or Finnpartnership aid
  26. 26. 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.A company from the north of In addition to overall sparring inFinland with some 30 employees internationalization, we gotset up a branch office in France valuable support from Finpro inand made a million-euro deal many practicalities. In internationalwith a world-famous aircraft negotiations the investments aremanufacturer. big and details complicated. Pekka Hosio, Managing Director, Champion Door Ltd
  27. 27. 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.A company from the north of In addition to overall sparring inFinland with some 30 employees internationalization, we gotset up a branch office in France valuable support from Finpro inand made a million-euro deal many practicalities. In internationalwith a world-famous aircraft negotiations the investments aremanufacturer. big and details complicated. Pekka Hosio, Managing Director, Champion Door Ltd
  28. 28. 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.A company from the north of In addition to overall sparring inFinland with some 30 employees internationalization, we gotset up a branch office in France valuable support from Finpro inand made a million-euro deal many practicalities. In internationalwith a world-famous aircraft negotiations the investments aremanufacturer. big and details complicated. Pekka Hosio, Managing Director, Champion Door Ltd
  29. 29. 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.A company from the north of In addition to overall sparring inFinland with some 30 employees internationalization, we gotset up a branch office in France valuable support from Finpro inand made a million-euro deal many practicalities. In internationalwith a world-famous aircraft negotiations the investments aremanufacturer. big and details complicated. Pekka Hosio, Managing Director, Champion Door Ltd
  30. 30. Champion Door Ltd. was established in 1974.Company is one of the leading manufacturers of largeindustrial doors in Finland, e.g. fire doors, smokecurtains, and other large scale doors for aircrafthangars, harbors, and energy store-houses etc.Internationalization of Champion Door started in1990’s, when the company made first deals to Russiaand later to some European countries.Champion Door needed help in defining the strategyand developing their international business plan, whichincluded a more focused product portfolio and marketselection.
  31. 31. Champion Door Ltd. was established in 1974.Company is one of the leading manufacturers of largeindustrial doors in Finland, e.g. fire doors, smokecurtains, and other large scale doors for aircrafthangars, harbors, and energy store-houses etc.Internationalization of Champion Door started in1990’s, when the company made first deals to Russiaand later to some European countries.Champion Door needed help in defining the strategyand developing their international business plan, whichincluded a more focused product portfolio and marketselection.
  32. 32. Finpro supported Champion Door in making thestrategic choice to focus abroad with one product line,aircraft hangars. Company decided to target theoperations to Central Europe and especially to France,where the greatest potential was recognized. At firstFinpro made a market study which was later deepenedby more detailed customer research. As a result EADSgroup was defined as the most potential client.With the help of Finpro, Champion Door has createdimportant contacts and tackled culture differences indifferent markets. Three years ago its internationalsales was 25%, now export brings in 75% of theturnover. Its greatest achievement so far is theEADS/Airbus deal worth over 10 million Euros in thenext three years.
  33. 33. Thank You ! More info: Kimmo Aura Regional Sales Manager, Americas Kimmo.aura@finpro.fi +358 40 504 831718/02/2013 © Finpro 35

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