Small business owners are receiving increasingly better financing terms

Lenders' risk appetite has returned after a prolonged period of uncertainty related to COVID-19, and small business owners are being offered increasingly lower interest rates. This is shown in Krea's Financing report, which analyzes 8500 loan applications from Q3 2019 until Q3 2021.

The COVID-19 pandemic has had a significant impact on financing terms and loan approval rates. Approval rates have now recovered to the same level as before the pandemic, while financing costs have decreased for businesses regardless of creditworthiness.

An increasing number of business owners are applying for business financing to support growth and expansion, purchases, and property & renovation projects. The growth and expansion category has seen the strongest increase, with the share of applications more than doubling over the past two quarters.

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We believe these figures are strongly influenced by COVID-related restrictions, and as these restrictions are lifted, we are seeing more businesses that dares to pursue new projects and make new investments that require external capital, such as business loans.