Business loan

How to get a business loan in Sweden?

Lenders such as banks and finance companies set different requirements for them to lend money to your business. The preparations and the application process also take different lengths of time. It has become increasingly difficult to obtain business loans through the bank. Here it can be advantageous to prepare the figures and data in advance. What do security, personal collateral, credit information, and business plan mean to you who want to borrow for your business? Here we help you sort the concepts. We hope this loan guide or the guide will help you get a business loan for your business.

Traditional business loan

This business loan is reminiscent of a private loan, with the difference that the loan amount is usually much larger, with some lenders able to offer amounts of up to SEK 6 million. The loan can be unsecured and consists of a fixed amount paid monthly over a period of time and on which the company pays interest. Interest is part of the cost of the loan and is paid on an ongoing basis throughout the life of the loan. The level of interest rates affects the market interest rate and any risk and security that the business has incurred. You can also influence the interest rate by choosing a variable or fixed interest rate. The variable tracks the level of the market interest rate, and fixes it protects companies against fluctuations in the market interest rate. In addition to interest, the loan itself must be repaid, which is usually done through repayments.

Lenders typically approve all types of businesses and lend to established businesses first and foremost, although start-ups can get loans as well. The business generally has to be covered by a turnover requirement of around SEK 50,000 per month or SEK 600,000 per year. More requirements for getting this type of loan are that the company must be active, registered in Sweden and the applicant must have a managerial position in the company. Sometimes the owner may also be required to reside in Sweden. Even though most business loans for amounts up to SEK 500,000 are given without collateral, some lenders may require collateral in the form that you, as the founder, have to post as personal surety, which means that you are required to pay if your business cannot reimburse. .

Commercial loans with collateral

It is common for banks and finance companies to require some form of security when lending money to businesses. These can be your business assets such as property, equipment or fixtures. For example, if you borrow money from a factoring company, the security is more your customer invoices. Personal property such as your home or vacation home can also serve as security. Always ask what applies when you leave security. Think about the consequences this could have for your business and your finances.

Borrow from the company with a personal guarantee

Banks and finance companies can ask for a personal guarantee to grant your loan. The person who signed the collateral will be responsible for repayment if you cannot repay the loan. Anyone can go on bail, but it’s more common for those running the business. Borrowing from the business with a personal guarantee means that you are confusing your business finances with your private finances. Think about what this can mean for your finances.

A solid business plan is often an essential requirement

Banks and some lenders want to see a business plan for your business to borrow money. If your business doesn’t have a business plan, there are templates online that you can use. The bank will look at the business concept, personal experience, industry, and business risks of your business. Tell us what sets you apart from your competition, how you plan to market your business, and how you will make money.

Requirements for forecasting and budgeting

The bank will always want to see a budget and forecast for your future results. Spend a lot of time on it. It is essential that the budget is perceived as realistic and based on the current situation. For example, if you run an established business, the bank will want to see financial statements and balance sheets. If you are applying for a loan to deal with an uneven flow of money, you need to show when the sale takes place and when the income arrives.

Credit information

All lenders collect credit information before granting loans to entrepreneurs, but process the data in different ways. For example, personal remarks about payments are a barrier to obtaining a business loan from some finance companies. Lenders can also examine your business’s payment behavior and determine if you tend to pay your bills late.