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Freelancer or self-employed? 8 steps to build your crisis package

Sole traders can get state funding and can also ask tax authorities and other agencies for flexibility during the crisis.

Yle News has also put together eight steps to finding your way through the different – and sometimes confusing – options available to entrepreneurs.

Covid-19 is having a big impact on the economy and self-employed people have been especially hard-hit, but there is help out there. A good place to start looking for information about relief programmes is the Federation of Finnish Enterprises' website.

As an organisation that lobbies for entrepreneurs and small businesses, they have a lot of clear information in English about where to go for financial support for businesses hit by the coronavirus pandemic. Especially useful is a handy table that can show you at a glance which of the many options apply to your situation.

This week's All Points North podcast looks at the plight of self-employed people in Finland. You can listen to the full podcast via this embedded player, Yle Areena, Spotify (siirryt toiseen palveluun), Apple Podcasts (siirryt toiseen palveluun) or your normal podcast player using the RSS feed (siirryt toiseen palveluun). Be sure to subscribe to the show wherever you get your podcasts.

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The Ministry of Employment and Economic Affairs also has this Q&A section, available in English and other languages, that could help answer some of the most common questions.

Yle News has also put together eight steps to finding your way through the different – and sometimes confusing – options available.

1. Apply for government-backed 2,000 euro grants

Self-employed-people and freelancers can get a grant of 2,000 euros to help pay for business expenses such as rents. As a sole trader you can apply for the funds at your local municipality.

The money can be used to cover costs incurred between 1 March and 31 August and applications can be submitted until 30 September. Local governments should begin receiving applications from 16 April.

Government initially said that it will spend 100 million euros on the grants, but additional funding announced on Wednesday means that more money might be in the works.

2. Tap into support for young families

The government's new multi-billion-euro measures also included assistance for parents who are staying home with their kids without pay.

The administration said a temporary 723-euro monthly subsidy (siirryt toiseen palveluun) (link in Finnish) would become available for families with children under the age of 10. Further information on how to apply for this particular benefit should become available in the coming weeks.

3. Apply for unemployment benefit for entrepreneurs

Under normal circumstances, entrepreneurs would have to wind down their businesses completely to be eligible for unemployment benefits. However under temporary new rules, they can continue to operate their companies.

According to national benefits agency Kela, applicants will need to submit a free-form statement outlining how the pandemic has affected their income and explain why the money is needed. The agency will also want to see all personal and company bank statements (both Finnish and foreign) as well as those of family members, in addition to company accounts.

Kela is also instructing solo entrepreneurs to first register as unemployed (in Finnish) at their local employment office before applying. It said that people can file applications from 16 April. It will also be possible to apply for the benefit retroactively, meaning payments start from the point you lost your income, not when you first applied.

While applicants are primarily encouraged to register online, they may also download and complete a paper form that they must then take to their local employment office.

Solo entrepreneurs can also apply for unemployment benefits in addition to the 2,000 euro crisis support they can get from their municipalities.

4. Ask the tax authority for help

The Finnish Tax Administration is also offering some flexibility during this period where businesses are finding it tough to survive.

The agency said that freelancers, self-employed persons – and indeed all business owners – can ask to defer the deadline for filing income tax returns so they don’t get penalised for filing late.

You can also ask for a payment arrangement if you can’t find money for advance tax payments, for example. In addition, you can request the authority change the months when those payments are due.

All of this can be done in English, either online in the MyTax service or over the phone. More detailed information is available at the tax administration’s website.

5. Ask for leeway with pension insurance contributions

Major pension insurance companies have announced some flexibility with respect to compulsory pension contributions, known as YEL payments in Finland.

For example, if a sole trader’s business income has been affected by the crisis, they can change the estimated income used to calculate monthly contributions to pay less. Most pension firms are also offering a three-month deferral on invoices, no interest penalties on late payments and they may hold back on sending overdue bills to collection agencies.

However freelancers and self-employed persons should check with their own pension insurance firm, as arrangements may differ from company to company.

6. Ask your banker for time

According to the Ministry of Employment and the Economy, commercial banks also say they will try to help independent businesspeople through the difficult economic situation.

"Banks have already indicated their readiness to offer instalment-free periods [on loans] and repayment schedule flexibility due to the exceptional circumstances caused by coronavirus," the ministry said on its website (in Finnish).

Overall, the advice from the ministry to sole traders is to seek financial support from their municipalities as well as the commercial banking sector.

7. Consider social credit as a last resort

Social lending is a voluntary system of support provided by municipalities to help people who have no access to regular forms of reasonably-priced credit or who have no collateral for a loan.

According to the Ministry of Social Affairs and Health, currently about 30 municipalities in Finland offer social credit.

There is usually a lending cap -- for example the maximum loan in Helsinki is 15,000 euros -- and some councils may tie the service to compulsory debt counselling. However there is one catch: if a loan is granted, the borrower's credit rating is damaged until they repay it in full.

8. Reach out for financial and debt counselling

Even with all this help, some people will get into debt during the crisis. Solo entrepreneurs who think they may need professional advice weathering the storm can turn to Enterprise Finland’s (Yritys Suomi) Talousapu financial and debt counselling services, which supports small and medium-sized businesses as well as entrepreneurs.

The service is free and aims to help entrepreneurs avoid bankruptcy. Experts assess the status of the company and can offer guidelines on how best to proceed in addition to providing insights into what other services are available.

Want to know more about running a business in Finland? Listen to our previous podcasts about what you need to know before taking the plunge and what it’s like to be an immigrant entrepreneur.