Business Outlook and Financing Alternatives of Finnish Entrepreneurs During the COVID-19 Crisis

Nordic Journal of Business, Forthcoming

31 Pages Posted: 5 Feb 2021

See all articles by Mikael Paaso

Mikael Paaso

Erasmus University Rotterdam (EUR)

Vesa Pursiainen

University of St. Gallen

Sami Torstila

Aalto University

Date Written: January 19, 2021

Abstract

This paper reports findings from a survey of 1,008 Finnish small-and-medium-sized enterprises (SMEs) on their business outlook and financing alternatives during the COVID-19 crisis as of June 2020. Sales have dropped by an average of 25%. The decline in revenues is generally uncorrelated with the number of coronavirus cases in a municipality, except in the hospitality industry and the arts, entertainment and recreation industry. 54% of respondents have applied for public subsidies, while only 16% have applied for a new loan from the bank. Across the cross-section of firms, firms reporting a larger loss of revenues and with a more precarious financial position at the end of 2019 (high debt and/or low cash) were more likely to apply for both direct grants as well as loans.

Keywords: COVID-19, Business outlook, Public subsidies, Finland

JEL Classification: G01, G32, G38

Suggested Citation

Paaso, Mikael and Pursiainen, Vesa and Torstila, Sami, Business Outlook and Financing Alternatives of Finnish Entrepreneurs During the COVID-19 Crisis (January 19, 2021). Nordic Journal of Business, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3779212 or http://dx.doi.org/10.2139/ssrn.3779212

Mikael Paaso

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Vesa Pursiainen

University of St. Gallen ( email )

Swiss Institute of Banking and Finance
Unterer Graben 21
St.Gallen, 9000
Switzerland

Sami Torstila (Contact Author)

Aalto University ( email )

P.O. Box 21210
Helsinki, 00101
Finland
+358 40 353 8069 (Phone)

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