Top 5 Reasons Banks Won’t Loan Money to Your Business in Sweden

Except if you come from a rich family, starting a business with your own money can be incredibly hard without external financial assistance. Even while running a business, you may need loans to pay off emergency bills such as workers’ salaries or maintenance.

Banks are mostly the solutions most businesses in Sweden turn to whenever they need a loan, whether small or large-scale businesses. However, some people who apply for loans at Swedish banks are often confused about why the banks or financial institutions failed to grant them the loan. Most of the time, the fault comes from your business; your business may fail to meet the bank’s requirements.

Brace up, as we will be discussing all the requirements you need to get a loan for your business in Sweden and why a bank might not give you one if you apply.

1. Debt-to-income Ratio

Most Reviews in Sweden will reveal to you banks that offer better loans with low-interest rates, better repayment plans, and easier accessibility. Whenever you choose a bank, they might not grant your business the loan you are asking for because of the debt-to-income ratio of your business; banks in Sweden are wary of businesses that won’t be able to pay them back.

Many businesses mostly don’t depend on one bank for their loans and funding, so Swedish banks will look at the past loans of a business before giving them a loan. If your business owes far too many financial institutions, it might make the bank bit to grant your business a loan due to a poor debt-to-income ratio.

2. Insufficient Collateral

Depending on the amount of money you are asking for, finance companies in Sweden might not offer your business the loan it needs because of insufficient collateral.

So whenever you are applying for a loan for your business, you first have to check if the collateral your business has will be enough to stand for the amount of money it is asking for.

3. Inconsistent Cash flow

Cash is king in business, so Swedish banks might be wary of any business that finds it hard to generate revenue at a certain period.

This check is considered to ensure that the business has enough income generation capacity to pay up for the money they are about to collect. Even for personal reasons, if you are buying a house in Sweden and need a loan, you must show proof of income.

4. Bad Credit Score

A bad credit score can easily hinder your business from getting a loan or funding from a bank; Sweden banks are concerned about credit ratings because it shows how diligent you are in keeping good financial records.

In Sweden, a credit rating of 7-5 shows a good credit rating, and 8-10 shows a better credit rating; anything less than that is bad.

5. Short Operation History

Most banks in Sweden prefer to give out loans to businesses that have been operating in the country for a long time.

There are exceptions to this, but you may encounter difficulties getting a loan if your business has not been in operation for a long time.


Getting a loan or funding for your business from a Swedish financial company can be hard, as your business has to go through many checks to prove its worthiness. Ensure your business has a good credit rating, consistent cash flow, and sufficient collateral; otherwise, you might be denied a loan.


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