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Best business loan 2024 | Read our guide

2024-01-08

The market for small business loans in Sweden has seen a volatile development under 2023. Overall volumes for new loans to non-financial companies has been declining ~3% for the period up to November 2023, according to SCB. Digital lenders have seen a different trajectory and managed to take market share from more established banks. We have looked through both our data and external information to find the answer to the question what lender has been offering the best business loans under 2023.

Do you want to find out what lender is offering the best solution for your business? Read more about business loans offered on Krea.

» More: Apply for a business loan

Our list of top business loans 2024

  • Froda
  • Aros Kapital
  • Marginalen Bank

All three lenders won in three of our 5 categories for best business loans 2024. Froda offers a flexible business loan without setup fee through a smooth process. Aros and Marginalen Bank stood out by having among the lowest cost and also requiring less personal guarantor commitment compared to other lenders.

Best business loans 2024

Froda, Marginalen Bank and Aros Kapital offered best business loans 2023
  • Froda offers business loans for small businesses up to 15 million Swedish crowns and has historically been one of the first lenders to use open banking data in their credit assessment. Access to real-time data has become even more important this year, as the economic environment has become less certain. Frodas business loans are flexible and fast - their time to payout was fastest at only ~4 days on average among the lenders Krea works with. In addition, they have a good payout ratio, probably as a result of gathering good insights into a business recent business performance through them utilizing banking data.
  • Aros Kapital offers small business loans up to 3 million Swedish crowns. In addition, they also offer a EU loan with only 20% guarantor commitment up to 500 000 Swedish crowns. The EU loan entails an interest rate discount of 1% that is an additional benefit for small businesses. Aros has been in the news as well during 2023 as it was forced to pay a penalty to the Swedish Financial Supervisory Authority of 45 million Swedish crowns as result of the companies handling of among other regulatory requirements on anti-money laundering. Having put this review aside, the lender seems to have been able to offer a compelling solution to many small businesses in need of financing last year.
  • Marginalen Bank offers small business loans up to 5 million Swedish crowns. The lender has been placed on our top list for the second year in a row. Their offering is comparable to Aros in that they also offer a EU loan. In addition, Marginalen Bank is one of the few lenders offering business loans to newly started businesses.

What banks offer small business loans?

Banks and other lenders that offer small business loans can be classified into different categories, mostly based on their registration they obtained at the Swedish Financial Supervisory Authority.

  • Large banks (SEB, Nordea, Handelsbanken, Swedbank)
  • Foreign banks (predominantly Danske Bank and DNB have a presence in Sweden)
  • Niche banks (Marginalen Bank, Svea Bank, Norion Bank)
  • Credit institutions (Froda, Aros Kapital, Serafim Finans)
  • Alternative lenders (DBT, OPR, Capitalbox, Fedelta, Capcito, EuroFinans, IMH Finans)
  • Crowdfunding platforms (Fundingpartner, Kameo, SBL Finans)

How did the market develop under 2023?

The impact of the weaker economic environment was definitely visible.

SCB, the Swedish statistical office, is publishing a monthly report on lending volumes. According to SCB, the lending volumes for businesses up to 10 million Swedish crowns have decreased slightly in 2023. In 2022, 298 billion have been lent out (January - November 2022), while it was only 290 billion in 2022.

This is 3% less compared to the same period in 2022.

Also the large banks have seen a similar trajectory in 2023. While the lending volumes for large Corporates (usually companies with 1 billion in revenues and more) mostly declined. Small business customers saw a flat to slight increase in lending volumes. For example, Nordea increased lending in their business banking segment from 94.4 to 95.8 million EURO (increase of 1.4%).

The only segment of business loans that increased in volume overall was business loans up to 250 000 Swedish crowns. Where volumes increased by 5%. This could be a result of new digital lenders taking market share. An indication can be seen in regulatory reports from digital lenders, such as Froda, where the exposure (i.e. loans) to customers increased from 1.1 billion Swedish crowns to 1.3 billion.

New business loans 2023

The market for small business loans is constantly evolving. There have been two bankruptcies in 2023 where previous lenders or crowdfunding platforms left the market (Corpia AB and SBP Nordic).

But, there have also been new additions to the market that satisfy the increasing need of businesses to finance growth or help them improve their liquidity.

New lenders under 2023

  • Within loans for businesses, we have seen 4 new lenders becoming active on Kreas plattform: Treyd, Akela, Terox Finans and Bizcap.
  • On top of that we started to work with more Leasing companies that offer an alternative to business loans. Among the new lenders in 2023 were Nordic Finance and Grenke Leasing - in addition, even Ikano Bank and Marginalen Bank offer leasing to their customers. Leasing is not part of this review, but is a relevant alternative for businesses looking to purchase new objects.

Lenders that were significantly less active in 2023

  • Resurs Bank has stopped partnerships with business loan brokers. They offered business loans up to 1 million Swedish crowns at relatively attractive interest rates. The bank is still operating as usual, but just wanted to look at its offering in more detail and improve it before becoming more active again.
  • Two lenders stopped bidding for business loans and their businesses applied for bankruptcy: SBP Nordic and Corpia. Both were specializing in real estate backed business loans, a market that took a downturn during 2023 as more borrowers were facing headwinds from a slowing real estate market.

Criteria used in our analysis

So how do we come up with our ranking of best business loans? We have defined 5 parameters that we at Krea deem important based on discussions with our customers.

The 5 parameters we use for ranking business loans:

  • Flexibility - are customers locked in a contract or can loans be easily paid back without cost?
  • Cost - simply, who offers business loans with low rates?
  • Personal guarantee commitment - what average percentage commitment of guarantors is required by the lender?
  • Time to payout - how long time does it take from the moment a customer selects an offer to payout?
  • Payout ratio - to what extent are lenders paying out business loans for which they place offers on Kreas platform?

Our analysis is quantitative in nature and we gave points for each lender ranking among the Top 3 in each category.

The most flexible business loans

A flexible business loan should both enable customers to get the loan without setup fee and also should not entail any lock-up period. Or cost to repay the loan.

Our criterias were:

  • Business loans without setup fee
  • Business loans without cost for early repayment
  • Business loans without fixed fee model

A few business loans are structured to entail a fixed fee instead of an interest rate. The fee is set upon taking the business loan and does not change over the period of the loan. For example, a business might take a loan of 100 000 Swedish crowns and pay monthly 1 000 for that credit. In the beginning the interest rate was 1%. But, after a few months when the loan has been repaid to 50 000, the interest rate gradually increases to 2% and in the final months can be even above 10%.

While these loans are easy to budget for, they lead to a lock-in effect for customers that face difficulties to repay the loans. Therefore, we do not include these lenders in this category of flexible business loans, despite the fact that many of these lenders advertise their loans as being flexible. Which is true, but only if the business does not face any payment difficulties.

Looking at the 20 most active lenders for small businesses we consider Froda, Capcito and Treyd to offer the most flexible business loans on the market.

The business loans with lowest effective interest rates

Business loans do not come with the same transparency as personal loans and lenders are often not required to publish effective interest rates. We do that calculation on behalf of our customers for each offer that we receive from customers.

Our criteria was: Lowest average effective interest rate, assuming the business loan was held to maturity.

During 2023 the business loans with the lowest interest rate were placed by Aros Kapital, Marginalen Bank and DBT.

With an increase of inflation, came also a general increase in interest rates. Businesses always paid higher rates compared to mortgages. But it is now even common for large banks and ALMI to take out rates of 10% and more, depending on the collateral structure of the business loan.

The lenders in our analysis that stood out the most offered the following average interest rates for business loans in 2023:

  • Aros Kapital - 9.9%
  • Marginalen Bank - 12.2%
  • DBT - 14.3%

With an interest rate under 10%, Aros Kapital has even offered terms that are more favorable than ALMI. All of the lenders with the lowest rates do normally have a small setup fee for their loans - this speaks to the situation that there in general is a trade-off between flexibility and price.

The loans for businesses requiring least guarantor commitment

Most often business loans require some form of collateral. The most common collateral are personal guarantees, where a business owner fully or up to a fixed amount guarantees for the repayment of the business loan.

We were hence looking for loans with a reduced guarantor requirement. And which lender generally required the lowest guarantor commitment.

The criteria was: Average percentage of guarantor commitment

The following options ranked highest: Aros Kapital, Marginalen Bank and Treyd.

Aros and Marginalen Bank both offer EU loans, where part of the funding amount is guaranteed by the European Investment Fund (EIF) and the business owner only needs to guarantee 20% of the loan amount.

Treyd offers a form of purchase order financing, where a company can pay their supplier invoices through Treyd’s platform. And payback 4 months later. For that service Treyd does not require any personal guarantee, as the invoices being paid sort of act as a security for the loan.

The business loans being paid out fastest

The time it takes to apply and secure a business loan has decreased in 2023. While the average was 8.5 days during 2022, it declined to 7.1 days in 2023.

The criteria we looked at was: Time in number of days from a loan being selected to paid out.

The fastest business loans in 2023 were offered by Froda, Capitalbox and Qred. The winner, Froda has improved its handling time during 2023 and decreased average time from ~9 days to only 4 days on average.The improvement predominantly came from an increasing use of open banking data that enables the lenders to more accurately assess the creditworthiness of a business.

Payout ratio - Lenders that fulfill their promises

A final consideration, we at Krea look at is how likely a lender fulfilled their indicative offer by paying out the business loan. This is important because when a customer selects an offer they also reject a few alternatives. If that offer was not sufficiently final, it may lead to time wasted that the business owner instead could have spent on running the business.

An easy way to estimate this is by comparing the number of paid out loans with how many customers the lender came in contact with. The so-called payout ratio.

The criteria we looked at was: Payout ratio

In 2023 the lenders that most sticked to their offers were Marginalen Bank, Aros Kapital and Froda. That means that customers selecting their offers were most likely to get funds paid out to their account.

Uppdaterad 2024-01-08