Real estate financing for your business

The interest rate on real estate loans for businesses is typically significantly higher than for a mortgage. Major banks offer more favorable terms for larger property companies, where the interest rate is around STIBOR + 1-3%. However, they usually lend only 50-60% of the property's value.

Niche banks lend 60-80% of the value at around STIBOR + 4-8%. Crowdfunding lenders and finance companies charge around 7-15% per year and are mainly used for project and bridge financing, or when the timing is critical.

Your monthly cost is driven by the interest rate and amortization. In our real estate loan calculator, you can calculate the monthly cost for different loan structures and loan-to-value ratios.

In today's market, the loan-to-value ratio is rarely above 75% for existing properties. In exceptional cases, a higher loan-to-value ratio of 80% may be possible. If you own multiple properties through a group, there's also a short-term opportunity for a higher loan-to-value ratio through refinancing equity.

How much you can borrow against the property depends on the type of property and the stage of the project.

For rental properties, major banks typically offer a loan-to-value ratio of only 50-60%. Additionally, a secondary loan may be relevant for increased leverage, but currently, this is capped at around 75% for rental properties. The loan-to-value ratio also varies depending on:

• The type of property and its geographical location. Central locations and major cities generally offer better opportunities for higher loan-to-value ratios.
• Number of transactions in the secondary market or the liquidity of the property.

For land acquisitions, banks usually only apply about 50% financing. There's a bonus if the developer has financed the land purchase themselves, significantly increasing the chances of obtaining a construction loan.

The exact requirements from banks and lenders vary between different institutions.

Fundamentally, there needs to be cash flow capable of covering interest and amortization. For properties, cash flow consists of gross rental income minus operating expenses, also known as net operating income (NOI).

Depending on the interest rate environment, different banks impose varying requirements on the minimum NOI-to-loan ratio that can be approved. Typically, it needs to be at least 6-8% for residential properties with major banks, and significantly higher for more economically sensitive properties.

In addition to repayment capacity, there are also various formal requirements, such as the company needing to be registered in Sweden.

In real estate financing, there are three common types of amortization:

• Bullet loan: A property loan where the entire principal is repaid at the end of the loan term, typically after 6-18 months. This is common for bridge loans or loans during construction. Crowdfunding lenders in Sweden, such as FundingPartner and Kameo, primarily offer bullet loans.
• Senior loan with a term of 20-50 years: Senior loans are typically obtained from the property developer's house bank. Only major banks offer terms of 20-50 years for property loans, such as Swedbank, SBAB, and Handelsbanken.
• Repayment schedule over 20 years: Instead of a long loan term, companies can also arrange for a lower repayment schedule over a 5-year property loan. This means the company amortizes 1/20th of the loan each year. They must repay the loan or extend it after 5 years.

A real estate loan can be used to buy, renovate or carry out work on a property. Companies can typically borrow 50-80% of the property's market value, with the property as security. If the company can't repay the loan, the lender has the right to take over the property.

Krea lets more than 30 banks and lenders compete for your business. These lenders can give you Real estate financing offers:

Kameo, Realkredit, Fedelta, Terox Finans, Bizcap, Svea Bank, Froda, Aros Kapital, Euro Finans, CapitalBox, FundingPartner and IMH Finans.

For larger financing deals, Krea works with all relevant banks, including major banks such as Nordea and SEB. The same application can also get your company offers for business loans, business credit, factoring and leasing.

Yes, as long as the basic requirements are met, it is possible to create an application even if a partner is resident abroad.

To create an application at Krea, it needs to be signed via BankID by a company signatory, so the person creating the application must have a Swedish BankID.

If the person is to be listed as a guarantor in the application, it is also important to think about where they have their income. The assessment of a guarantor is made based on the person's taxed income in Sweden. If the person has no income in Sweden in recent years, the lenders usually cannot accept the person as guarantor.

Yes, we have a wide range of providers who can offer proposals for property loans with collateral in land/plot, construction loans, or bridge loans during property construction.

With the niche banks Krea mainly works with, terms are usually 1-5 years. At maturity, the loan is either extended or repaid in full. Major banks offer longer terms of up to 20-50 years, usually with straight-line amortization over the term. In some cases, amortization can be spread over a much longer period, up to 100 years, which lowers the monthly payment.

We can also collect interest-only offers, where you pay only interest each month (a bullet loan). This works well during construction, when you want ongoing payments as low as possible.

Yes. We work with a wide range of lenders who offer interest-only real estate loans.

These bullet loans usually run for 6-18 months.

Through Krea, you can apply for real estate financing between SEK 1-200 million. It is usually possible to borrow up to 80% of the property's value. At Krea, we always offer competent advice in real estate loans, which means that we help our customers compile the right documents. You don't need to understand all the financing details. Krea's advisors take care of it.

There is nothing statutory or pre-determined regarding cash investment for real estate loans for companies. Cash investment in real estate loans depends on the project, type of property and other circumstances/conditions that exist.

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 brokering 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 Dun & Bradstreet), 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.

A real estate loan can be used for the vast majority of property types:

Loans for premises and warehouses: Do you need part of a property for your main business? It could be premises for a shop or restaurant; purchase of business and office premises to be able to open an office; or a warehouse as part of the distribution chain.

Loans for rental apartments: Many developers take out short-term real estate loans while building new rental properties. These are refinanced into a long-term loan when construction is complete.

Loans for industrial property: Many industrial companies own, rather than rent, the property in which they conduct their business. This has the advantage that you get a better return on possible renovations and costs can be lower in the long run than renting a non-adapted property.

Loans for forestry and agricultural property: A business loan for the purchase of land or a farm property is also called a property loan. As these investments have a permanent value, they can also be used as collateral in the loan. The majority of the value can be mortgaged (up to 80% of the property's value with some banks).

And also other properties such as:

• Loans for commercial properties
• Loans for workshops
• Loans for land acquisition

Up to SEK 10 million, the service is free for you and the lender pays us. Above SEK 10 million, we work under an engagement agreement. The fee level is agreed before we go to market and is paid once the financing has been drawn down. No financing, no fee.

Our indicative offers show the full cost, including interest and fees. We also calculate what it would cost if you repay early.

Under our best-terms guarantee, an offer through us is always as good as or better than going directly to the lender. For deals up to SEK 10 million our fee isn't added on top of your interest rate. The lender absorbs it as a customer acquisition cost.

We have no loan book of our own, no ownership of any lender and no volume targets. Our recommendation is always based on the deal and what's best for your company.