I’ve always been under the impression from my research that the Finns were pushed towards Germany mainly because they had essentially lost all contact with the outside world when Norway fell, but TTL Norway is still free. The influence from the western governments is therefore stronger compared to OTL so Finland isn’t pushed towards Germany as hard, which is enough for them to hesitate about entering the war long enough for the Allies to offer them the territory they lost in the Winter War along with a more than fair sum of reparations, which was enough for Finland to stay neutral, though they certainly aren’t on good terms with the Soviets.
I think you are partly right.
IOTL, by the summer of 1940 Finland was very isolated and thus saw Germany as the only realistic source for help against the Soviets, who were continuously acting aggressively towards the country. In the case of Norway avoiding German occupation an joining the Allies, Finland's position would be better. But it would still be very precarious. The USSR is still a clear and present danger (hence the need for sizable weapons purchases, etc), and Finland's foreign trade is still mostly potentially blocked by the Germans who control the southern Baltic Sea and Denmark. The great majority of all Finnish exports and imports has always run through the Baltic Sea, from and into the major ports on the Gulf of Finland and in the southwest near Åland, especially. Comparatively, transporting anything in major numbers through Petsamo and overland through Sweden and Norway is much more difficult and expensive.
IOTL, there was a huge effort to use Petsamo for foreign trade in 1940-41, and even though major resources were given to that project (which included using a major percentage of all the trucks in Finland to run goods down from the harbour of Liinahamari to the railhead at Rovaniemi, 530 km one way). During its year of running between spring 1940 and spring 1941, 340 000 tons of goods were imported through Petsamo, at great effort and expense. Impressive? Perhaps. But even with the port of Liinahamari operating at its maximum capacity, that number of goods only amounted to under 25% of all Finnish imports prewar in the year of 1938.
Meanwhile, in the Winter War, Finland had lost some of its best farmland in Karelia, and the main trade port of Viipuri/Uuras. The country had been just barely self-sufficient in terms of food prewar, now it was in a position where it would need significant food imports just to avoid starvation. Serious shortages in fuels and fertilizers were also projected to follow soon, which would then work to shrink the upcoming harvest in 1941 as well. And so on. This all was well known by the Finnish government by the summer of 1940.
In these conditions, in 1940 Finland can't afford to wait in the sidelines to see how the wind blows. It will need political and material support against the USSR, and it will need major food, etc, imports
soon to ward off famine by 1941. And this is why I am asking if the Allies have been ready to practically go all in to support Finland with weapons, fuels and food, etc, in major numbers, already from the summer of 1940. If they are not, the Finns will turn to the Germans in the fall of 1940, like they did IOTL, practically out of desperation. Supplying Finland all the goods it needs will be much more demanding through the north, especially if the Swedish put any restrictions on using their territory, roads and railways (in the name of neutrality and in view of likely German and Soviet protests), than it would be through the Baltic Sea. Norway and the Allies would then really have to commit to the effort to help Finland, and I am traditionally sceptical of them being ready to do this in the conditions of summer-fall 1940 if metropolitan France has just recently fallen to the Germans, and when the Allies have much more important priorities than Finland, also at a time when the Soviets are still de facto in league with Nazi Germany.
So, in short, while I believe that the Allies
could keep Finland out of the German camp in 1940-41 if Norway is unoccupied and Allied, I consider it unlikely that they would be in the event ready to commit to the effort strongly enough and early enough, in view of the practical difficulties involved and also against expected Soviet diplomatic protests, to avoid the Germans striking first with their promises of significant support to Finland, and with actual shipments of grain to southern Finnish ports to prove that they are good with their word.