Small business loans in Scandinavia and the UK


Although many see it as a liability, a business loan can create a lot of exciting opportunities for your business. Whether it’s to increase cash flow, hire staff or invest in marketing.

From a lender’s perspective, the market for small business loans is significant both in the UK and across Scandinavia. Sweden, for example, has many similarities to the UK market and offers several loans to small and large businesses, as well as start-ups, Across the country.

More similarities between the Swedish market and that of the UK is the way the offers are structured as well as in the rules and regulations. We will cover some of these aspects later in this article.

What is a business loan?

First of all, it is important to define what a business loan is. In short, it is an agreement whereby the lender gives money to your business and in return you agree to pay it back. The amount of the business loan may vary depending on the use or investment of the money.

In Sweden and the UK, loans can be secured or unsecured.

  • Secured : this means that the collateral for the loan will be one of the business assets like machinery or property. If the loan cannot be repaid, the lender will simply cash the asset instead.
  • Insecure : if the loan is unsecured, there is no asset to use as collateral. Instead, as a business owner, you could be personally liable if the loan is not repaid as agreed.

The benefits and risks of business loans

As mentioned earlier, a business loan can create a lot of exciting opportunities for the business. A business that aims to increase its capacity (whether in terms of staff or production), the money can be used to invest in real estate and hire staff. Loans can also be used to increase cash flow.

However, as with all loans and investments, they come with certain risks. It is important to discuss the risks of a business loan when planning a potential business loan. For a small business, this can be even more important, as they usually present a higher risk, with no assets to secure the loan.

Guarantee / personal liability

If you have chosen an unsecured loan, there is a personal deposit of the director. This means that you, as the manager, agree to repay the loan in case the company itself cannot. For a small business, this is a greater risk because you are personally responsible for all debts.

Loss of assets

If the loan is secured by an asset, a risk if the loan is not paid on time is that the asset will be lost. Since the assets typically used for business loans are machinery and property, they are vital assets for the business itself.


By using a business loan broker, you, as a business owner, can get help finding a cheaper loan. A business loan broker like Creddo in the Swedish market, allows you to create a request on their site, which is then sent to several lenders. If your application is accepted by the lenders, the company will receive several loan offers.


Charges may be added if payment is not received on time. It may also happen that several late payments cause difficulties when applying for future loans.

It is important to compare the benefits and risks when planning a business loan. For your safety and that of your business, it is also important to ensure that the lender is authorized either by the Prudential Regulatory Authority or by the Financial Conduct Authority. Therefore, research and business plans should be recommended before deciding.

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