Business Loans forSole Proprietorships
Sole Proprietorship
Traditional lenders often find it difficult to assess smaller businesses with limited track records. Froda uses a data-driven credit assessment that evaluates your business’s actual performance by analyzing your transaction data, rather than requiring detailed business plans or a long-standing customer relationship.
This makes it easier for you, as the owner of a sole proprietorship, to access financing when you need it.
How to Apply for a Business Loan for a Sole Proprietorship
The application process takes a few minutes and works like this:
- You will verify your identity using BankID and consent to Froda retrieving and reading your transaction data.
- The system analyzes your data in real time.
- You'll receive a response—usually within a few minutes, but always within 24 hours.
Applying is free, and there’s no obligation.
Interest, repayment, and costs associated with taking out a loan for a sole proprietorship
When borrowing money as a sole proprietor, understanding the costs is essential. Since business loans from Froda are annuity loans, you pay the same amount with each repayment. There are also never any hidden costs, such as origination fees or statement fees; the interest is the only cost associated with the loan. This makes it easy for sole proprietors to keep track of how much they’ll pay for the business loan.
The interest rate you receive from Froda is determined on an individual basis and depends on factors such as the loan amount, term, and creditworthiness. Since interest expenses are tax-deductible and the finances of a sole proprietorship are not kept separate, you, as the owner, can deduct this expense on your tax return.
Another important factor is flexibility. As a business owner, you know that revenue can fluctuate. That’s why Froda offers flexible terms and repayment options. You can repay the entire loan at any time without incurring additional fees. If you find yourself in a temporary slump, you also have the option to pause your payments for a period of time.
Here are our terms and conditions:
- Interest rate: Custom pricing with a lowest price guarantee
- Amount: The available loan amount varies by individual. Froda offers loans ranging from 5,000 SEK to 5 million SEK.
- Term: up to 60 months
- Credit check: via CreditSafe
- No setup fees
- No delivery charges
- No administration fees
- No hidden fees whatsoever, quite simply
- Repay your business loan at no cost, whenever you want, on My Pages
- Registered company in Sweden with active sales
Sole proprietorship as a business structure
A sole proprietorship is the simplest form of business in Sweden, where the owner is effectively permitted to conduct business activities but bears unlimited personal liability. In a sole proprietorship, therefore, no distinction is made between the owner’s personal finances and those of the business. Starting a sole proprietorship is free of charge and requires nothing more than the owner registering for F-tax. There are also fewer administrative requirements for sole proprietorships, which is why they may be suitable for smaller businesses.
Since personal and business finances are not separate in a sole proprietorship, personal finances will also affect the amount of a business loan a sole proprietorship can obtain.
Personal Liability for Business Loans to Sole Proprietorships
Keep in mind that a sole proprietorship is not a separate legal entity like a corporation. This means that your personal finances and the business’s finances are closely intertwined, and that as the owner, you are always personally liable for the business’s contracts and debts.
Since the owner of a sole proprietorship is personally liable for the business’s debts, it is the owner’s personal assets that serve as collateral if the sole proprietorship takes out a business loan.
What can sole proprietorships use business loans for?
For a sole proprietorship, a business loan can be useful for both large and small needs. It can act as a catalyst to scale up and take the company to the next level, as well as to tackle short-term financial problems.
Business development and growth
A business loan can be used to finance expansion plans. It can be used to open new stores or offices, acquire competing companies, or to diversify the company's products and services.
Liquidity
Available capital is necessary for a company to meet its needs. Sometimes companies need extra liquidity to handle short-term financial challenges or opportunities. A business loan can act as a buffer to handle unexpected expenses or rapid growth opportunities.
Marketing
Marketing is crucial to reaching a wider customer base. Business loans can be used to finance campaigns, develop the website, or participate in trade shows and events.
Equipment and technology
Business loans can be useful for updating and renewing the company's equipment and technology. By investing in modern technology and efficient work tools, productivity can be increased, operating costs reduced, and the quality of products and services improved.
Consolidate loans
For a sole proprietorship that has accumulated several smaller loans, credits, or installment purchases, a business loan can be used to lower the company's total costs. By consolidating it into one loan, the interest costs can be reduced. It also simplifies administration by avoiding having to manage repayments to several different parties.
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).
