How to Avoid the Pitfalls when Applying for a Start-up Grant


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The start-up grant aims to secure a new entrepreneur's primary livelihood for the estimated time it takes to establish business activities. Therefore it is an income supplement intended for entrepreneurs and doesn't belong to the business assets. After all, they must be able to live and perhaps support their family even when it may not be possible to pay themselves enough salary at the starting stage of the business.

A start-up grant is not paid automatically. It is a discretionary subsidy that must be applied for at the local TE Office. When applying for a start-up grant, a proper business plan is needed. Enterprise agency's business advisors will help new entrepreneurs with these plans.

Manager of Vaasa Region Enterprise Agency Startia, Tommi Virkama, lists the facts worth knowing about a start-up grant and how to apply for it:

  1. A start-up grant must be applied for before starting any business operations.

    Since start-up grants can only be paid to support new businesses and employment, the applicant has to be either an unemployed jobseeker or start as a full-time entrepreneur after doing paid work, studying or household work. Nowadays, a part-time entrepreneur can also apply for the grant when expanding their business into a full-time one.

    When starting a new business, the most important rule is that the start-up grant must be applied for before beginning business operations and having the Business ID. It takes a few weeks to apply for the grant and process the application at the TE office.
  2. Invest time in writing a detailed business plan.

    The requirement for a start-up grant is that the business idea is profitable. The profitability of the business idea is highlighted in the business plan and the related profitability statement, which is submitted to the TE Office with the grant application. The calculations must show, for example, where the company's financing comes from, how much loan is needed and where it is applied. A business advisor can help you when considering these options.

    Startia's LISSU Online Business Planning Program assists in drawing up a business plan. A business advisor can comment on your plan in LISSU and guide you forward.
  3. Start-up grant is not given to all entrepreneurs in all industries.

    It is advisable to discuss with a business advisor or a TE Office representative your business and its industry concerning the likelihood of receiving the start-up grant. According to TE Office's policy, start-up grants will not be given if they can significantly distort competition.
  4. There must be no other income.

    A start-up grant is only awarded if necessary for the entrepreneur's livelihood. So the applicant must not receive salary income, student aid or other benefits. Also, the grant is denied if it is estimated that the business operations will start off well straight away, for example, if the company already has customers.

    – As an example, this may be the case when a person starts as a full-time entrepreneur after doing paid work and provides services to their former employer, Virkama explains.
  5. Remember to submit an extension application for the start-up grant.

    The amount of the start-up grant is EUR 34.50 per day, paid only on weekdays, and it is taxable income. It is granted in two parts; first for six months and then for another six months if there are grounds for payment, i.e. the entrepreneur needs it for their livelihood.
  6. Don't rely too much on the start-up grant.

    The start-up grant is not a large sum of money, and six months pass quickly. So it doesn't bring you far if the business isn't profitable. Therefore, it is worthwhile to invest time in the careful planning of your business activities.

    – You are always welcome to book an appointment with a business advisor, even if you have just an idea. Let's discuss the idea and develop it into a plan and implementation together. Startia and VASEK's business advisors are happy to help you throughout the start-up phase and also after the business launch. There is no need to be left to ponder these things alone, Virkama emphasises.


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