Hämeenlinna sets up loan fund for businesses banks may turn down

Hämeenlinna is establishing a fund to lend to local small and medium-sized businesses seeking to grow but unable to secure enough financing from banks. The city says the model is the first of its kind in Finland, Yle reported.

The fund is intended to fill financing gaps for companies whose growth needs cannot be met through sources such as Business Finland funding or the businesses’ own cash flow. Loans will prioritise job creation, environmental benefits and regional economic growth.

“The catalytic fund is a competitive advantage for Hämeenlinna,” said Roosa Romanoff, a business expert at Linnan Kehitys who helped prepare the fund. She said its goal is to encourage local small and medium-sized businesses to grow and increase investment in the region.

Marko Ahtiainen, chief executive of Häme Entrepreneurs, said access to finance was a problem for small and medium-sized companies in Finland. Businesses need more private capital to fund growth and take risks, he said, adding that the fund could provide an example for other cities.

Hämeenlinna will initially invest 400,000 euros. OP Häme, Lammin Savings Bank and LähiTapiola Loimi-Häme are among the other investors expected to take part. The fund is scheduled to begin operating in 2027.