OP’s InnovFin & Initiative risk-guaranteed loans fostering growth, creativity, and innovation – case: New Nordic School
July 07, 2020
A funding strategy with a combination of different instruments helps to support startups’ growth. Read below how this has supported New Nordic School to transform the current systems of education by expanding faster to new markets.
One of the instruments that innovative startups can consider utilizing is risk-sharing guaranteed OP loans.
For the financing needs of growth-seeking businesses, OP offers several solutions. OP can obtain a 50% risk-sharing guarantee from the European Investment Fund (EIF) that helps to cut your company’s financing costs by reducing the needed collateral. These two risk-sharing guarantees called SME InnovFin and SME Initiative are aimed for small and medium-sized companies that are looking for high growth. New Nordic School has obtained two risk-guaranteed loans from OP, that have helped them to grow faster to new markets.
“It’s a significant saving in time that we have been able to invest in expansion, sales, and marketing, in those markets much faster than we otherwise would have.” tells Co-Founder and Chair of New Nordic School Janne Jormalainen.
Success story: New Nordic School
In the ever-changing world, the decision-makers of tomorrow need skill sets that help in creating future success stories – innovation, creativity, and collaboration – just to mention a few. New Nordic School is fostering these skills with their educational solutions both in new and existing schools around the world. Currently, the focus is on three main markets: India, Middle East, and Southeast Asia.
Janne Jormalainen describes how startups can expand operations globally: “You have to actually look at where the opportunities are the biggest and then recruit the kind of a team that is able to do it.”
From a single country point of view, India is currently the New Nordic Schools biggest market. “We have a lot of clients in India and currently a lot of implementation projects, where we are implementing both pre-school and K-12 schools.”, Jormalainen mentions.
New Nordic Schools K-12 educational system is designed in a way that helps students to shape their future: “What we are aiming to do is to prepare them for an unknown future.”
Funding the market expansion
Creating a funding strategy helps growth companies to fuel their expansion. In April this year, New Nordic School closed a seed-funding round with a total of 2,5 million euros. This includes funding instruments such as private equity, governmental instruments, and bank loan from OP.
The combination of different funding instruments enables faster expansion and helps in saving time. “So, I think that it’s really the fact that you utilize a basket of different instruments in a way that it supports the growth of the company.”, Jormalainen encourages early-stage companies.
OP’s loan application process
New Nordic School has used InnovFin risk-sharing guaranteed loans from OP to support its expansion and business development. The application process with OP is very straightforward: “You basically negotiate the loan with your bank, and then you obviously need to make an application also to Finnvera which also is usually involved in these guarantees.”, Jormalainen describes.
“I would encourage startups to be more active in that sense. To have a discussion with their own bank to see if this InnovFin loans or some other instruments could actually be helping them to grow.”, he adds.
Does the SME InnovFin or SME Initiative risk-sharing guarantee suit your company?
EIF financing is targeted at unlisted SMEs in need of financing for profitable investments and working capital.
SME InnovFin is a good financing solution, especially when your company is growing fast or is innovative and invests significantly in product, service, and process development. The risk-sharing guarantee facility suits SME with a staff of less than 500.
SME Initiative is suitable for SMEs to finance investments on a more extensive basis employing less than 250 people. The risk-sharing guarantee facility is restricted by government aid granted within three financial years through De minimis regulation. The risk-sharing guarantee is fully exploited.
Take a closer looks at risk-sharing guarantee facilities:
InnovFin risk-sharing guarantee for innovative SMEs
Initiative risk-sharing guarantee for SMEs
More information about the SME risk-sharing guaranteed loans:
Pirjo Koponen, Executive Director