Krea's new AI service will help small businesses find the right loan amount
Skriven av: Carsten Leth
Senaste uppdatering: 17 juli 2024
Applications for loan amounts that are too large often result in worse loan terms. That's why we have released an AI service to help small businesses identify the right loan amount.
Swedish companies, on average, are only granted 63 percent of the desired loan amount and receive financing proposals with 23 percent higher interest rates when they initially apply for amounts that are too large. The number of credit checks associated with business loan applications is another factor that contributes to worse loan terms. If businesses from the start apply for an amount that the bank considers reasonable, meaning an amount within the company's borrowing capacity, they receive better loan terms. For this reason, we have developed a new AI-based comparison service aimed at helping small businesses apply for the right amount from the beginning, thereby increasing their chances of obtaining better terms.
We noticed that many business owners applied for amounts that were too large during the COVID-19 pandemic. This reduced their chances of obtaining the desired financing on the best possible terms. Now, as many are restarting their operations or preparing for another challenging winter, we want to provide businesses with better conditions to apply for the right amount.
Carsten Leth, CCO at Krea
Carsten continues:
Another problem that businesses face when they want to borrow is that a new credit check is performed each time they apply for a loan. When a lending institution sees that many credit checks have been made on the same business, it is considered a warning signal, which in turn reduces the company's chances of obtaining loans on favorable terms. By using Krea's AI service, businesses can get an indication of how much they can borrow without any credit checks being performed.
Carsten Leth, CCO at Krea
The new AI service, developed based on an analysis of 30,000 loan offers we have facilitated for customers since January 2019, provides instant results. This is done by the company entering its registration number and a few key figures into the model. They then automatically receive a response indicating the likely loan amount they will be approved for.
Our service is based on a model that learns from each application we facilitate. We automatically collect public data about businesses via APIs, which allows us to provide a highly accurate indication. This transparency about companies in Sweden has so far mostly helped banks and lenders make assessments, but we want to enhance the ability of small businesses to benefit from their own data.
Carsten Leth, CCO at Krea