Press

New statistics from the fintech company Froda indicate that Swedish companies' investments in their own operations fell in the second quarter of the year. When the loan performance of over a thousand small and medium-sized enterprises is analyzed, a slowdown is visible against a strong first quarter.

The spring has been marked by major movements in the economy, with rising interest rates, the highest inflation rates in over 30 years, and shortages of materials and components due to both the pandemic and the war in Ukraine.

- "We can see that small business owners invested a lot in their businesses at the beginning of the year. Many have finished their renovations, seasonal investments and building up inventories for the holidays," says Olle Lundin, CEO of Froda.

• Demand for financing for seasonal investments, such as business loans for the expansion of an outdoor restaurant, has decreased by 40% compared to the previous quarter, but is 8% higher compared to the first quarter of 2021.
• The share of those who invested in renovating their business in the last quarter has decreased by 22%, but is up 14% compared to the same period last year.
• Investments in inventories have decreased by 13% compared to the previous quarter, but are up 55% compared to the same period last year.

- The figures reinforce the picture that small business owners entered the year with great optimism but are now more cautious about their investments. So far, however, they seem to be in a good place given the international situation. "Given the uncertainty in the external environment, it is reasonable to assume that we will see an increase in the proportion of companies in need of working capital to cope with, for example, price increases and extended payment times for invoices," says Olle Lundin.

Machinery will have to wait

The only area that declined overall, quarter-on-quarter and year-on-year, was investment in machinery. At the beginning of the year, there was a sharp increase in demand for financing for new machinery, but this trend has stalled and is down 33% in the second quarter. The continued high price of fuel is a possible explanation, alongside rising prices for the machines themselves due to both component shortages and inflation.

Here, small and medium-sized enterprises are reducing investment in the business:

Machinery:
-9.76% compared to the previous year.

-32.73% compared with the previous quarter.

Renovations:

+14.98% compared to the previous year.

-22.12% compared to the previous quarter.

Seasonal:

+8.24% compared to the previous year.

-39.94% compared to the previous quarter.

Product storage:

+54.72% compared to the previous year.

-12.77% compared to the previous quarter.

Froda, one of Sweden's fastest growing fintech companies, is launching the "More than a parenthesis" initiative to draw attention to the fact that the proportion of women running businesses in Sweden is still low. At the same time, the company is launching a scholarship for female entrepreneurs.

- Only a quarter of all entrepreneurs in Sweden are women, which is below the EU average and a serious underestimate considering that half of Sweden's workforce are women. "With 'Women Entrepreneurs of the Future', we want to help improve the conditions for female entrepreneurs and give more women the opportunity to invest in their ideas," says Olle Lundin, CEO of Froda.

The initiative "More than a parenthesis" is launched on International Women's Day and highlights the fact that Froda has not differentiated between genders in credit assessments since its inception, but that there is still a low proportion of women running businesses in Sweden and that action is needed to change this. In connection with the launch of "More than a parenthesis", the "Female entrepreneurs of the future" scholarship is also established. The scholarship will be awarded annually, starting in the fall of 2022, to a female entrepreneur. The aim is to give women who want to start a business the opportunity to invest and realize their ideas.

- Increasing the proportion of female entrepreneurs will not only lead to greater gender equality in society, but will also drive social development forward. More women entrepreneurs will lead to Sweden having more successful companies. Companies that will help create more jobs, increased tax revenues and more innovation," says Olle Lundin.