, LLC Business Loans
How do business loans work for corporations?
A business loan for corporations gives you access to capital in exchange for the company repaying the principal plus interest over a set period of time. At Froda, the loan is an annuity loan, which means that each payment is the same amount throughout the term of the loan, but the breakdown between interest and principal shifts over time. You pay more interest at the beginning and more principal toward the end. You can make payments daily, weekly, or monthly, pause payments for up to 6 months, and pay off the loan early whenever you want. Early repayment is always free, and you only pay interest for the time the loan was active.
1. Online application using BankID
Youfill out the company's information on the form and verify your identity using BankID. The application takes a few minutes and is free of charge.
2. Credit check via Creditsafe
Weassess the company's ability to repay based on transaction data and credit history. The credit check is conducted through Creditsafe, not UC.
3. Notice of Interest Rate and Amount
Usuallywithin minutes, always within 24 hours. You’ll receive a personalized offer based on your company’s actual performance, and you can adjust the amount and term before signing.
4. Same-day payment
Oncethe agreement is signed, the funds are deposited into the company's business account on the same day. Repayments are then automatically deducted from the same account according to the interval you selected.
How large does a corporation have to be to be eligible for a loan?
Froda was founded to provide small businesses with access to financing and therefore does not require limited liability companies to be of a certain size in order to qualify for a loan. However, the size of a limited liability company does affect the amount of the loan that can be granted, as the loan amount is determined by the company’s revenue.
Can you lend your own money to your corporation?
Yes, as the owner, you may lend personal funds to your own limited liability company. The arrangement is recorded in the books as a debt owed to you personally, and the company can repay it when its liquidity allows. You are entitled to charge market-rate interest on the loan; however, the Swedish Tax Agency requires that the interest rate not be unreasonably high.
It’s a quick way to boost liquidity without external requirements, but it ties up your personal capital. Draw up a clear promissory note so that the terms are documented. A business loan to the corporation leaves your personal financial cushion untouched and allows the company to raise external working capital instead.
What are the requirements for loans to corporations?
The requirements vary among lenders. At Froda, the following applies to corporations:
1. A corporation registered in Sweden
The companymust be registered with the Swedish Companies Registration Office and be actively conducting business.
2. Swedish Business Account
The loanis disbursed to and deducted from the company's Swedish business account.
3. Recurring revenue
The companyneeds to have revenue that can be tracked, as we assess its ability to repay based on transaction data over time.
4. No outstanding debts with the Swedish Enforcement Authority
Previouspayment defaults may be accepted in certain cases if the applicant’s overall financial situation is stable.
5. Personal guarantee
In most cases, one or more guarantors are required to guarantee the loan.
How do you apply for a loan for a corporation?
1. Application
Youfill out your loan application for a limited liability company and verify your identity using BankID. The application is completely free, and there are no obligations.
2. Credit Check
Froda conducts a credit assessment of your limited liability company based on your application. We use Creditsafe instead of UC, which is an advantage since multiple inquiries with UC can lower your credit score. This process usually takes just a few minutes, but no more than 24 hours.
3. The Offer
You'll receive a loan offer with an interest rate and terms tailored to your corporation. If you'd like, you can adjust the loan amount and term before signing the agreement.
4. The Payment
When you accept the offer, you’ll sign the agreement digitally, and the funds from your loan to the limited liability company will be deposited into your business account within 24 hours.
What are the risks involved in lending money to a corporation?
A business loan is a concrete financial obligation. There are a few risks to keep in mind before submitting your application.
1. Liability as a Guarantor
A personalguarantee means that the debt becomes a personal liability if the corporation is unable to pay. The corporation’s limited liability therefore does not apply to the portion for which you have provided a guarantee.
2. Liquidity pressures during periods of economic weakness
Aloan is an ongoing expense. If revenue drops, the loan payments can become a heavy burden, even if the repayment schedule itself is planned and predictable. With Froda, you can pause your loan payments to ease the pressure on your cash flow if your corporation is going through a rough patch.
3. Over-indebtedness
Aloan addresses a capital need, not a structural profitability problem. If the business isn't fundamentally viable, you risk postponing the problem rather than solving it.
What are the benefits of taking out a loan for a corporation?
A business loan provides a corporation with the capital it needs to take immediate action to invest, expand, or seize a business opportunity that would otherwise have slipped away.
1. Quick access to capital
You'll usually receive a responsewithin minutes, and payment is made the same day the agreement is signed.
2. Maintain the ownership structure
Youraise capital without diluting ownership or giving away board seats, as is the case with venture capital or stock offerings.
3. Flexible Repayment
Pauseyour loan payments for up to 6 months if needed, and pay off the loan early at no extra cost if business picks up.
4. Predictable Structure
An annuity loanin which each payment is the same amount and interest is the only cost.
FAQ
The guarantee means that Froda should always offer a price that is at least as low as our competitors. If you have received an offer for a loan at a lower price from another bank than what you have been offered at Froda in the last 30 days, we will always match that price. The guarantee otherwise requires comparable terms (e.g., amortization and collateral) and only covers applications that have been granted loans by Froda.
With Froda, you don't have to choose between smooth and affordable financing; you get both. Through new technology and data-driven analysis, we have developed a service that is easy to use and saves you time and money. Therefore, we can offer business loans with the same security and affordability as the major banks, but without all the time-consuming and complicated administration. You also never have to worry about hidden fees or commitment periods. The interest is the only cost you pay for the loan, and if you want to repay early, you can do so completely free of charge.
Froda offers business loans up to SEK 5,000,000. On average, we grant a loan amount that corresponds to one month's turnover in your company (provided that the business is well managed). It may happen that you get to borrow more or less than the amount you applied for. Read more about our prices and terms.
Interest rates and terms are individual and based on your company's sales, history, and data. Read more about our process and assessment under pricing & terms. The interest is the only cost you will pay for the loan. There are never any extra costs such as set-up, invoice, or administrative fees. The cost of the loan is affected by the loan amount, the repayment period, and your company's turnover and creditworthiness.
To find out your price, simply submit a non-binding application. If you find a lower price elsewhere, we will match that price through our lowest price guarantee. The guarantee is subject to comparable terms and conditions.
Froda is a Swedish credit market company based in Stockholm that was founded in 2015. By digitizing the process for business loans, we have made it possible to help more companies with tailored financing based on their unique business concept and operations, at market-leading terms. Froda was founded with the ambition to be a responsible lender, with clarity and transparency regarding fees and terms, treating its customers in an honest, fair, and professional manner.
Today, Froda is one of Sweden's fastest-growing fintech companies and has helped more than 50,000 companies grow. In addition to business loans, Froda offers savings accounts for individuals and embedded financing services through Froda Embedded. Froda is a credit institution that has a state deposit guarantee and is under the supervision of the Swedish Financial Supervisory Authority (FI). The founders are active in the company, and behind the company are many well-known investors, such as Karl-Johan Persson (HM), Nicklas Storåkers (Avanza), and Victor Jacobsson (Klarna).
