Business Loans:General Partnerships
General Partnership
A general partnership is a business structure that, in some ways, resembles both sole proprietorships and limited companies. Like sole proprietorships, general partnerships do not require any initial capital, and the administrative requirements are lower. However, a general partnership always has two or more owners, known as partners, who can be both individuals and legal entities, and can therefore be seen as an association of several business operators. Just like limited companies, general partnerships are separate legal entities, but unlike limited companies, the partners are personally and jointly liable for the company's agreements and debts.
How do loans for partnerships work?
A loan to a partnership is taken out by the company as a legal entity, but the partners are personally and jointly liable for repayment. This means that any of the partners may be required to repay the entire amount if the partnership stops making payments.
With Froda, the loan is an annuity loan. Each payment is the same amount—the breakdown between interest and principal shifts over time, so you pay more interest at the beginning and more principal toward the end. You can make principal payments daily, weekly, or monthly, pause your payments for up to 6 months, and pay off the loan early whenever you want. Early repayment is always free—you only pay interest for the time the loan was active.
How Partnerships Apply for Business Loans
1. Online application using BankID
Fillout the partnership's information on the form. It will take a few minutes.
2. Credit check via Creditsafe
We review the partnership's ability to repay its debts and the partners' personal finances. No credit check.
3. Notice of Interest Rate and Amount
Usually within minutes, always within 24 hours. You’ll receive a personalized offer based on the trading firm’s actual performance.
4. Same-day payment
Once the agreement is signed, the funds are transferred to the partnership's business account on the same day.
How large does a partnership have to be to qualify for a loan?
There are no specific requirements regarding a certain level of revenue or a certain number of employees for a partnership to be eligible for a loan from Froda. The deciding factors are the company’s ability to repay the loan and its creditworthiness.
Our assessment is based on the partnership’s actual performance—sales, transaction history, and cash flow. This means that even smaller partnerships with a stable financial foundation can qualify for financing.
Can you lend your own money to your partnership?
Yes, you can lend the partnership your personal funds if the business needs a quick cash infusion. The amount is recorded as a debt owed to you personally, and the partnership can repay it when its cash flow allows.
This is a common practice for covering short-term expenses, but it ties up your personal capital. A business loan to the partnership leaves your personal reserves untouched and allows the partnership to raise external working capital instead.
What are the requirements for loans to partnerships?
Requirements may vary among lenders, but certain basic conditions almost always apply. It’s therefore a good idea to compare loans for partnerships before making a decision. At Froda, the following applies to partnerships:
1. Registered partnership in Sweden
Yourpartnership must be registered in Sweden in order to be approved for a loan.
2. Swedish Business Account
The partnership needs a Swedish business account into which the loan can be disbursed and from which principal and interest payments can be deducted.
3. Recurring revenue
To assess the partnership’s ability to repay its debts, Froda analyzes the company’s transaction data. For this reason, the partnership needs to have recurring revenue that can be tracked over time.
4. No outstanding debts with the Swedish Enforcement Authority
You cannot obtain a loan for a partnership if you or the partnership has an outstanding debt with the Swedish Enforcement Authority. Previous payment defaults may be accepted in certain cases if your financial situation is otherwise stable.
5. Personal guarantee
As a partner in a general partnership, you are already personally liable for the company’s debts, and the guarantee means that you will be liable for payment if the general partnership is unable to make the repayment.
What are the risks of lending money to a partnership?
The greatest risk is joint and several liability. The debt is not automatically divided equally among the partners; instead, the lender can demand payment of the full amount from any one of you if the partnership is unable to pay.
1. Personal Liability for Payment
If the partnership goes bankrupt, the loan debt falls on the partners personally.
2. Conflicts Among Partners
Ifa partner is unable or unwilling to pay their share, the remaining partners may be liable for the entire debt to the lender.
3. Liquidity Pressure During Slower Periods
A loan is an ongoing expense. If your income drops, the loan payments can become a heavy burden, even if the repayments themselves are scheduled and predictable.
What are the benefits of taking out a loan for a partnership?
A business loan provides the partnership with the capital it needs to take immediate action—such as hiring employees, restocking inventory, investing in equipment, or seizing a business opportunity that would otherwise have slipped away.
1. Quick access to capital
A decisionis usually made within minutes, and payment is made the same day the agreement is signed.
2. Maintain private buffers
Youwon't have to dip into your personal savings or tie up your own capital in the partnership.
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 loanwhere each payment is the same amount—the 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).
