Tighter business loan requirements

The number of companies in Sweden has grown sharply in recent decades – from 796,000 companies in 2003 to 1.1 million companies in 2017. At the same time, many entrepreneurs find it increasingly difficult to get financing to grow. The report “Financing for Jobs and Growth” from the Entrepreneurs, published earlier this year, showed that more than half of the surveyed companies considered it difficult to obtain external financing for the company.

Tough rules from the banks and high personal loan requirements are the most common reasons for the difficulty in obtaining loans. About six out of ten respondents in the Entrepreneurs’ Report, who have taken out corporate loans, stated that they had provided personal guarantees for corporate credit, either through themselves or a personal relative.

“When I have been seeking funding for the 17-18 years I have been an entrepreneur, the bank has not wanted to be involved, or finance with reasonable terms. I will go into private with 50%, pledge my house for the rest and then I will have a personal guarantee as well. In addition to this, the bank has wanted to have a higher interest rate for the risk they take … I asked the question at one time, what risk are you, the bank, taking and were then sworn that these are the rules they have! ”, States one entrepreneurs in the report.

 

Growth Agency: Major obstacles in some industries

business loan

Figures from SaveAccess Finance also show that a large proportion of small and medium-sized companies see the difficulty in obtaining corporate loans and credits as a problem for growth. The biggest problem is for companies that want to grow both with turnover and employees, where about 20 percent say that they see access to loans and credit as an obstacle.

The perceived difficulty in obtaining funding also differs in different industries. Energy, water and electricity, followed by manufacturing and extraction, are the industries where most entrepreneurs state that access to loans and credits is a problem. At least, the problem is in healthcare and care.

 

New service should speed up the process

business loan

To overcome the problem with the banks’ increasingly stringent requirements, the Swedish listed company CoinAxis AB, which invests in small and medium-sized expanded companies, has launched its new service Liquid . The service should make it easier for especially small businesses to quickly and easily apply for a corporate loan.

“It is not always easy to be a small business owner, and sometimes the money is not enough or it is time to take the next step. It can be a little difficult to have to contact your corporate bank, and it is often both cumbersome and takes a long time to get a loan. If now the traditional bank grants a loan. Banks’ requirements have increased significantly in recent years and the high requirements often result in a negative message when small businesses apply for a traditional bank loan, “Liquid writes on its website.

Entrepreneurs can apply for loan amounts between USD 10,000 and USD 500,000 and the loan period is either six, nine or twelve months. All types of company types can apply, both individual companies and limited companies and trading companies.

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