Business Loan - Find the Best Loan for Your Business

The cost of a business loan usually consists of interest or fees. The interest rate for business loans is higher compared to a mortgage, because the banks require less collateral and the loan can usually be repaid early without cost. The interest usually corresponds to between 7-30% per year and is set based on your company's sales and credit rating.

Most small business loans of up to 1 million kronor are without an initiation fee and commitment period. For larger loans and business loans from major banks, there is usually a set-up fee of 1-3% and a cost for interest rate difference compensation.

In our business loan calculator, you can calculate the monthly cost of different business loans.

We annually present an analysis of the best lenders in business loans among the 30 lenders and banks that Krea cooperates with.

Which bank stood out as the best when it came to business loans in 2023?

According to our analysis and evaluation of the lenders we work with, we believe that Froda, Marginalen Bank and Aros Kapital have been the lender that offered the best solution for small businesses in 2023. Our analysis was based on five criteria: flexibility, interest rates for business loans, time to payout, payout ratio and requirements for a personal guarantee.

» Read more: Krea's guide to the best business loans 2024

Through Krea, you can apply for a business loan of up to 30 million kronor. However, not all companies need such large business loans.

A rule of thumb in business financing is that you can borrow approximately 10% of the company's annual turnover. Alternatively, companies can borrow approximately 1-4 times the operating profit.

If you want to borrow more than 10% of the annual turnover, the lender usually requires more collateral, such as several guarantors or a business mortgage. Through leasing or real estate loans, companies can also take out loans of generally larger amounts, as the object constitutes an additional security for the lender.

Do you want to estimate how much your company can borrow?

Estimate your credit limit in 1 minute - without UC

Different companies are offered different interest rates depending on factors such as the company's industry, size, history, and collateral.

However, we also see that the same company is offered different rates from different banks, and offered rates can vary widely, ranging from 7% to 50%. That's why it's important to always compare banks before a company takes out a loan.

• Interest rates on business loans typically range from 7% to 15% per year. Currently, major banks offer rates starting from 7%, while rates from niche banks start from 8-9%.
• Business loans with a fixed fee usually have a monthly fee of 1-4%. The interest rate would then correspond to an annual rate of 24-96%. However, loans are often repaid early, which can result in a lower effective interest rate in practice.

The longest term among our lenders is 5 years (60 months). Most proposals from our lenders are without binding periods, which means you can repay the loan early if you wish, typically without any additional costs. Therefore, it's generally better to apply for the maximum repayment term to minimize your monthly payments during the loan period.

Amortization of business loans can be straight-line or as an annuity, where interest and repayments are always the same amount. A business loan with a 5-year term means you would amortize 3 333 kronor on a loan of 200 000 kronor.

Yes, however, only one UC is registered for your company and one UC for you if you are a guarantor.

Please note that lenders may conduct additional credit checks within the framework of loan mediation on behalf of Krea Technology AB, but these checks are NOT considered separate UC checks and do not affect your creditworthiness. This is because Krea has a partnership with UC that allows multiple lenders to access the same UC.

Lenders may sometimes obtain information from other institutions (e.g., via CreditSafe or Bisnode), but these do not impact the creditworthiness of the company or individuals listed.

A single UC does not significantly affect your company's creditworthiness. It is only if multiple UCs are taken within a short period that it may have a negative impact on creditworthiness.

Yes, even start-ups can get business loans.

As a start-up company has less historical data to show, it is recommended to include the following documents with your application:

• Business plan
• Liquidity budget, especially if you want to apply for a larger loan for the company.

This can give an indication of the ability to repay the company loan even if you do not have a financial statement ready yet.

Yes, having a few payment remarks is quite common for businesses.

Having payment remarks, whether for you or your company, may not be an obstacle to obtaining financing for your business. Having payment remarks does not necessarily mean that your company lacks future repayment ability.

Each lender makes an individual assessment of your company's repayment capacity, and loan proposals you receive may vary depending on the nature of these remarks.

When specifying a guarantor, it means that the person becomes obligated to take over the debt if the company cannot pay voluntarily. Guarantors are usually used in cases where the company cannot meet the repayments, serving as an additional security for the lender.

In the application with Krea, we recommend that you specify yourselves as guarantors, as we have observed that it increases the likelihood of your application being approved.

In addition to you as a guarantor, other individuals in the board can also act as guarantors for all banks and other lenders. You can always specify who should be guarantors in your application.

Yes, business loans can also be taken out with a fixed interest rate. However, there are three different types of fixed interest rates.

A fixed fee on business loans means that you always pay the same fee. The fee is set based on the initial loan amount - for example, for a loan amount of 200 000 kronor, a fixed fee could be 2 000 kronor per month. The fee remains the same even if you only have 100 000 kronor outstanding. It's therefore important to review loan agreements regularly and ensure you're not paying too much for the credit.

Examples of lenders offering a fixed fee include Qred, Capitalbox, Fedelta, OPR Finance, and Eurofinans.

Fixed rate with the right to adjust means the bank sets a fixed rate but reserves the right to make adjustments based on conditions outlined in the terms. Adjustments may be made if factors influencing the lender's calculation of the interest rate change, such as increases in the benchmark rate or unforeseen cost increases affecting the lender. In practice, this means the lender can adjust the interest rate if necessary.

Examples of lenders offering a fixed rate with the right to adjust include Marginalen Bank, DBT, Svea Bank, and Froda.

Fixed interest rate on business loans means you always pay the same interest rate, regardless of changes in the central bank's policy rate. This is a common arrangement among certain credit market companies and also for most business leasing agreements. As you repay the loan (i.e., make amortizations), interest payments decrease gradually, but the actual interest rate remains unchanged. Some lenders using a crowdfunding model also apply a similar method when setting the interest rate. When investment projects are digitally accessible to investors on crowdfunding platforms, an interest rate is determined and remains fixed throughout the term.

Examples of digital lenders offering a fixed interest rate include Funding Partner, SBL Finans, and Kameo. Major banks such as SEB, Nordea, and Handelsbanken also typically offer an option with a fixed interest rate.

Variable interest rates on business loans mean that your interest rate is based on a reference rate. A common reference rate is STIBOR (Stockholm Interbank Offered Rate) or the newer variant SWESTR (Swedish krona Short Term Rate). The reference rate applies to short maturities and can therefore change significantly over a short period. Typically, an agreement is made stating "Reference rate + 6%," which means the actual interest rate is set on the disbursement date. Subsequently, the interest rate can be adjusted at different intervals, such as annually, but it can also remain fixed for the duration.

Example - STIBOR is 2.22% at the disbursement date and your agreement indicates STIBOR + 6.5%. In this case, the variable interest rate on your business loan is set to 8.72%.

Variable interest rates on business loans are a common arrangement for several credit market companies and are typically used for larger business loans ranging from 2 to 30 million kronor.

Yes, in many cases, you can pay off the entire business loan in advance. In several cases, it is free of charge, and with some lenders, there may be a small fee for doing so.

This information is clearly stated when you receive your various business loan proposals.