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Business loans in Sweden
Today, Sweden is not only considered one of the highest performing economies in the world but it is also ranked as the fourth most competitive economy in Europe. This is attributed to its strong business climate, diverse language skills, global competitiveness, its commitment to innovation, and its free-market environment. But looking closer at everything, the lack of finance in Sweden is still a big problem for many business owners just like most countries in Europe. Getting the finances required for investment and expansion of business might be a problem in Sweden, but loans are always there to help companies and businesses cover their payroll or purchase inventory whenever there is a need to improve cash flow and grow business.
In Sweden, the trend of borrowing has extended far beyond traditional banks to include a wealth of online lenders who provide businesses with better loan options. In this article we are going to talk about loans in Sweden basically on types of business loans, who can apply for a business loan, how much can someone apply, what it takes to qualify for a business loan, the requirements, and how to apply for a business loan.
Speaking of loans, Business loans in Sweden are similar to other types of loans since it also a debt that has to be repaid with interest afterward. Good news! Most lenders in Sweden are comfortable lending to different types of businesses, whether it is a limited or privately held company, an old or a brand new business, or a sole proprietorship of a partnership. In other words, any business owner can apply for a business loan as long as the business passes the evaluation done by the lender.
So how much can you apply for to get a business loan?
Well, that would depend on a couple of factors such as the amount the lender is willing to lend you, your business of company’s financial status and credit profile, and the repayment period. On average, you can borrow from 1,000 up to 2,000,000 SEK with a repayment period of up to five years.
What are the types of business loans you can access in Sweden?
In Sweden, there are a few types of business loans that you can check in case your company or business needs one. This includes:
This is the most common type of business loan in Sweden. It is your typical loan where you get a lump of cash for your business and later pay it back with interest within the agreed period.
Just from the name, this is a type of loan you would seek if you have a startup business. Such loans are lenient since they take into account the risks associated with startup businesses.
Business lines of credit
This is a type of business loan that will fund you up to your credit limit then you pay interest on what you have spent.
Working Capital Loan
This is a business loan that provides your business or company with funds to manage daily operations like dealing with temporary drops in profit.
This is a loan that helps your company or business pay for heavy equipment and any other physical asset your business needs as part of its day-to-day operation.
What are the requirements to access business loans in Sweden?
If you’ve tried to apply for a business loan and your application has been rejected upon request, then, you might be wondering what it really takes for you to qualify for a business loan in Sweden. Currently, in Sweden, lenders do a comprehensive evaluation of each application. The essence of these criteria is to enable the lender to know if the business or company can handle the loan and repay it afterward. Other than this assessment, lenders also tend to use Credit Safe on businesses and companies without their knowledge to double-check their credit score for them to determine a considerable offer.
Bear in mind that getting a business loan in Sweden isn’t quite the same as getting other types of loans. This is because business loans often come with their own set of requirements. For instance, the business should hold a Swedish bank account, the company should be registered with the Swedish company registration office and hold a valid business registration number, and the business owner should be a Swedish citizen and resident. In addition, lenders use your credit score to determine how risky you are as a borrower and set a credit score you must meet. The lenders may also require a minimum of 2-5 years in business or company for them to feel more comfortable before lending anything. Other requirements that the lenders may need are; Annual revenue, personal debt to credit ratio, personal income, and potential collateral to secure the loan.
Once you have known what is needed to get a business loan, the only part left is knowing how to apply it. When applying for a business loan in Sweden, lenders will require certain financial records and documents before approving your loan. These documents needed include a Tax return for your business, a business plan indicating your intentions for the loan, personal and credit information, three to five years of company revenue figures, business bank statement, and cash flow history, business certificates and licenses, current profile, loss statement among other legal agreements. After giving out your documents and filling out the application forms, sit back and hope for the best. On getting the response, you will have to decide on whether to get the loan or not depending on the offers provided by the lender.
While the requirements for getting a business loan in Sweden might be scary at first, just know it is not an impossible mission. In fact, you’re making the right choice if you decide to get a loan for your startup business in Sweden simply because the Swedish Startup Ecosystem has proven to be fruitful throughout the years. Overall, financial institutions and banks in Sweden will offer you different loans depending on your company or business profile. Therefore, always compare the different types of loans offered by different lenders before making a decision.