The Best Business Loans in Finland

Compare the best options on the market and choose the one which best adapts to your day to day needs.

Further Below: Our Guide To Business Loans in Finland, Everything you need to know.

1. Nordic bank

  • Offer loans of up to 70,000 euros
  • Flexible interest rates
  • Unsecured loan
  • Fast payout
  • Laxer application procedures
  • Excellent repayment period of up to 15 years
  • Loans available for any purpose
  • Offers free application 

2. OP (osuuspankki)- cooperative bank

  • Flexible loan limit of up to 15,000 euros
  • Annual interest of 7.9% plus a Euribor of 3 months 
  • Offers a grace month once a year 
  • Lenient application procedures
  • Loan purpose is diverse
  • Fast approval 
  • Limited to OP customers
  • Customized repayment terms

3. Saldo loan

  • Offer loans of up to 50,000 euros
  • Friendly interest rates of 13.99% p.a
  • Fast approval within 5 minutes
  • Hassle-free online application  
  • Long  repayment terms of up to 88 months
  • Simpler eligibility criteria
  • Applicants with stable income are preferred
  • Available for various purposes

Business Loans in Finland, All You Need To Know:

It is our responsibility to inform you about all available business finance options in Finland. Read on to gain an understanding of the many credit options, the most recent financial news, and all the conditions and documentation needed to obtain this form of consumer loan in Finland.

[UPDATE] What economic measures has the Government implemented for companies through covid-19?

Finland, like many other nations throughout the world, was severely impacted by the Covid-19 pandemic. However, the government intervened straight away to shield businesses from the negative impacts of the crisis, which had an impact on the social, physical, and financial worth of financial markets. Regarding financial assistance programs for businesses and independent contractors, the government has put in place several laws and regulations that would aid businesses in surviving the pandemic.

  • The Annual Percentage Rate of consumer credits at its maximum rate of 20% in March 2020 was slashed down to 10% during the period. This made it easier to meet the required rates of payment.
  • Creditors’ rights and obligations to pursue debtors are reduced hence debtors are not pushed into bankruptcy. Liquidity inefficiency is also considered a major reason during the pandemic.
  • Entry into debts was loosened to finance borrowers with small financial needs hence their operations were still running even during the pandemic.
  • Marketing of consumer credits directly through online platforms and other advertisement websites is postponed to minimize the credits offered in financial markets.
  • The ECB institutions with the guidance of FIN-FSA calculations have increased the credit lending limit to 30 billion euros.
  • Commercial banks have been granted the ability to offer a 12 months grace period to SMEs with an increased credit limit.
  • Small business bank loan repayment was postponed for six months, during which time the company missed neither the capital nor the interest payments. Tax and social security contributions could be delayed for businesses in the tourism industry.
  • The government put in place liquidity measures, including moratoria for pandemic-affected firms that lasted until September 2021. New grace periods and loan maturity dates were implemented by the policy.

Distinguishing types of company profiles

Your company’s financing will be heavily influenced by the type of business you have. The characteristics of your firm will greatly influence the kind of finance that your company is eligible for. The different types of businesses are listed below:

  1. Companies
  • Entrepreneurs: Entrepreneurs develop strategies and plans for the type of company they want to run. They can determine the economic needs of a certain area and develop a business plan to meet those needs. However, they can only carry out their ideas after they have funding.
  • Start-ups: It’s a level above entrepreneurs in its structures. The company already exists, but it is not financially sound enough to be eligible for large business loans. As a result, it needs time and consistency in its operations to grow. The loans acquired are to finance the growth phase.
  • Consolidated companies: These are businesses that have a longer track record and fixed revenue, making them reliable and secure businesses that provide the lending institution with additional security. It is inclusive of large companies and SMEs.
  • Large companies: These businesses operate on the broadest possible scale (national or international). Their needs are in the millions of euros, and they have a high turnover. Finland is well known for such huge companies and hence has more intense financing for these companies.  
  1. Self-employed
  • As legal entities: They are experts who work for themselves and can need money for their company. They may also be classed as “consolidated organizations” or “start-up firms” depending on their income, but with loans tailored to a single borrower’s needs.
  • As natural persons: These are people who finance their financial needs using personal loans. They obtain income from other sources apart from employment income.

Characteristics of business loans

Depending on the lender, different business loans offer distinct features. The following measures should be used to compare these loans, nevertheless, and they are as follows:

  1. Cost: When considering how to finance your business, this is the first element you should consider. If the interest rates are reasonable, a loan is regarded as excellent debt since it will enable you to expand your company, take care of all business requirements, and repay the credit without difficulty.
  2. Amount. Depending on the size of the operation and the quantity of turnover, a business will be eligible for a particular amount of credit. The loan amount a business is likely to receive will be smaller the smaller it is.
  1. Purpose. Various reasons have different loan terms, depending on your lender. Therefore, speak with your lender to learn about their requirements for any objective you have in mind, such as growing your company, purchasing equipment, and paying off supplier debt.
  1. Linkage. Financing is always accompanied by associated products, particularly in banks, such as insurance, business accounts, or other items that require mandatory recruitment.
  1. Term. They range from 2 months to 60 months depending on the organization. It is usually determined by the loan amount, purpose, and other adverse conditions set by the lender. A borrower’s business profile determines the repayment period.
  1. Grace period. This is the period between loan disbursement and when the first repayment installment is made. This is usually determined by the organization.
  1. Guarantee. This is relevant for large loans where the lender requests “payment insurance” in exchange for a guarantee or piece of property.
  1. Speed. As some loans tend to issue loans months after application, make sure to know when you’ll receive the money after your loan application is granted.
  1. Repayment. Before applying for a loan, it’s critical to understand the repayment terms. Others require that you make monthly installment payments, while others want you to make the principal payment along with any accumulated interest and commissions after the loan term.

Where to get business loans

The monopoly of banks, which persisted for many years in Finland’s financial industry, has been undermined by the entry of numerous companies offering consumer loans. The development of Finland’s financial systems led to the creation of accessible financial solutions that may be tailored to meet various loan requirements. So, regardless matter how special your financial condition is, you can get a loan that suits your company’s needs.

Which entities provide business loans in Finland?

  1. Banks: These are the most established and well-liked sources of company loans. Only businesses that can demonstrate that they are solvent enough to repay the loan are given loans, among other criteria. However, SME bank loans are being provided with faster concessions and better terms.
  1. Companies and private capital lenders: In comparison to other categories, the procedure of requesting a loan and obtaining the funds falls under this one more quickly. The entire application is done online. They provide exceptional financial goods that are either better than banks or in competition with them.
  1. Alternative financing platforms for crowdlending: These are websites run by enterprises that facilitate the introduction of investors and borrowers. Once connected, it is the investor’s choice whether to give the borrower working funds. The interest will be paid to the investor after the borrower begins making loan payments. The entire loan application and processing are done online, and it takes just two days to get back to the applicant.

We will be eligible for various types of financing based on our distinct financial circumstances. So, make sure to do a thorough financial audit to determine which loans your business is eligible for and which you will be able to repay without incident.

Business loan conditions

Every business owner applying for a loan must fulfill the following fundamental standards by the Finnish Law on Consumer Credits:

  • Annual income: Before providing finance, lenders will be able to evaluate your company’s solvency using these documents. To assess whether you can afford the loan you’re applying for, the lender will examine your profits and business expenses.
  • National registration: The company or business looking for finance must be registered and operating per Finnish Law, which oversees and regulates businesses in Finland. Lenders won’t be reluctant to provide credit if you do this.
  • Good credit history: Work to keep your business’ credit history with the Finland Central Credit Register favorable. A low credit score will make it difficult for you to get loans.
  • The seniority of the company: While there are loans specifically designed for startups and small businesses, large loans will only be made available to consolidated organizations that will be able to repay the debt.

Documents needed to get funding

  • Bank statement if the application is on another bank
  • Income tax returns
  • Corporate tax compliance document
  • VAT return
  • A financial year balance sheet to show the company’s turnover

Depending on the option of the entity, these documents may be sent physically or electronically.

Other forms of financing for companies

  1. Business credit lines

These special financial instruments provide you access to a specific sum of money, which you are free to withdraw gradually. You won’t have to pay back the entire amount if you decide to repay the loan; instead, you’ll only have to pay back the principal amount you withdrew plus interest.

  1. Factoring

This type of financing is best suited to self-employed people and small to medium-sized businesses when the borrower decides to settle invoices with two or fewer suppliers later. Thus, the lender transfers the funds to the supplier immediately. We then pay back the lender the loan amount plus interest and other fees.

  1. P2B or crowdlending loans

The borrower communicates with a private investor via these online platforms, and the investor decides whether or not to invest in the business initiative. Depending on the crowdlending platform we utilize and the investor firm we select, the terms of these credits may vary.

  1. Loans with mortgage guarantee

These mortgage loans will only provide financing if the borrower can provide a guarantee of some kind. In this situation, the borrower is required to provide a property that is roughly equivalent to the loan amount.

Products to invest in our company

  1. Equity crowdfunding

These are web stores that have just lately entered the Finnish financial market. The platforms connect the borrower in touch with professionals and private investors that fund our company projects. Before agreeing to these loans, it’s crucial to understand that the professionals and investors will receive a portion of your firm’s revenues as well as a stake in your company. 

  1. Business Angels

Similar to equity crowdfunding, an internet platform is used to link the borrower and the investor. However, the organization providing these loans will choose whether or not to have one of its Business Angels invest in your company. The investors, who primarily fund large-scale business projects, will own a portion of our company.

  1. 3F (Friends, Family, Fools)

Those that provide financial support for our business endeavors are referred to as the “3 Fs” (Friends, Family, and Fools). The terms of funding are determined by the agreements that the lender has signed.

Aid for the financing of companies

  1. Capitalization of unemployment

Only self-employed individuals who want to launch a business are eligible for this sort of financing. As a result, they receive unemployment benefits that are intended for them.

  1. Crowdfunding

Borrowers can receive funds from sponsors interested in our projects using crowdfunding platforms. As a result, the business owner or entrepreneur posts information about their ventures on a platform so that potential investors may find them and contact them.

About this page, our methodology

What is this page for: On this page, we focus on assisting you in selecting a financial solution that best fits your economic needs. For you to choose the most appealing product, we, marshal the best information that is currently available regarding consumer credits and what to take into account when selecting an option. This will help you obtain liquidity with lower payments.

Source: the information regarding business loans in Finland and their current regulation comes from the Finnish Consumer Credit Act, Government portals, and financial institutions such as banks among other reliable sources.

Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.

About FUNDGECKO: This platform’s financial comparison tool attempts to give users useful personal finance knowledge. Through this website, all users can compare and choose between the top financial products available right now, completely free and without any obligations. They can also gain access to all the necessary information to make an intelligent and responsible purchase of the financial product that best suits their financial situation.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.

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