An important part of running a business is having access to capital. In fact, many companies go bankrupt due to poor liquidity despite making profits. During an expansion phase, capital is needed to be able to invest in new machines, equipment or personnel. A good way to finance a growth is to take a business loan.
Demand for profitability
Borrowing money for a new business is very difficult. The bank wants security for its loan, which can be done in the form of a corporate mortgage in combination with the personal guarantee. It is much easier to get loans to a company that already shows profitability and where there are good opportunities for growth.
Investment loans and overdrafts
Most banks offer loans to companies in the form of investment loans or as bank overdrafts, so-called bank overdrafts. The investment loans are generally between SEK 50,000 – 250,000 and are intended to be used for the purchase of new machines, equipment or extensions in premises and on buildings.
The second type of ordinary loan to a company is an account credit that can be used to cut temporary peaks in costs. It can be to build a little extra stock before Christmas shopping or bridge periods with lower liquidity. This type of credit often has a fixed fee per year and a variable interest rate depending on the credit used.
Loans from private individuals become more common
In recent years, it has become increasingly common for companies to also borrow from private individuals. Peer-to-peer (P2P) is called the loan form that wants to simplify the loan market and decouple the loan system from the banking world. It may be most common between private individuals, but now several actors have emerged where companies can turn to borrow money from private individuals.
Crowdfunding is a concept that is more often heard and services have helped many realize their ideas on new products and services.