The last few years have been challenging for many small businesses, with rising costs and an uncertain business environment. As a result, the need to borrow to cover unforeseen expenses has increased. However, new statistics from business lender Froda show a reversal of this trend, as the need to renovate and invest in machinery increases.

The need to cover unforeseen expenses has increased among Sweden's small business owners in recent quarters. However, statistics from the second quarter of the year show a positive change: for the first time in a year, the need is decreasing and small businesses are investing for the future.

- It is positive to see that many companies are starting to invest and invest for the future again after a tough period. The fact that the need to cover unforeseen expenses is decreasing is a good sign, even if the levels are higher than a year ago. The fact that we see an increased willingness to invest in machinery and renovations indicates that Sweden's entrepreneurs have once again begun to look ahead," says Olle Lundin, CEO of Froda.

Sweden's small business owners have chosen to invest in improving the efficiency and quality of their operations during the second quarter of 2023. Froda's statistics show strong growth in investments in machinery and renovations, where investments in machinery have increased by almost 14 percent during the quarter and renovations have increased by 13 percent.

- The fact that investments in machinery and renovations are increasing shows that small businesses are committed to strengthening their businesses and meeting future challenges. Something that is important to maintain a competitive position in the market and ensure long-term growth," continues Olle Lundin.

About the statistics
Every quarter, Froda compiles statistics showing what Swedish small businesses invested in during the last quarter. The statistics come from Froda's databases and are based on information about thousands of companies.

Contingencies:
Compared to previous quarter: -21.8%
Compared to same quarter last year: 35.5%

Machinery:
Compared to previous quarter: 13.9%
Compared to same quarter last year: 31.7%

Renovation:
Compared to previous quarter: 13.0%
Compared to same quarter last year: 8.1%

General liquidity:
Compared with the previous quarter: 0.3%
Compared with the same quarter of the previous year: -10.6%

Inventories:
Compared with the previous quarter: -1.1%
Compared with the same quarter of the previous year: 8.1%

Seasonalinvestments:
Compared with the previous quarter: -17.5%
Compared with the same quarter of the previous year: -2.5%

Froda is launching its card-based embedded lending in Denmark together with Lunar and Visa. The launch follows a successful test period and aims to make it easier for Danish small businesses to access financing on favorable terms, in order to secure capital to drive growth.

Small and medium-sized enterprises (SMEs) make up 99% of all Danish businesses* and play an important role in Denmark's economy and competitiveness. Nevertheless, SMEs often face obstacles when they need financing, limiting their growth potential.

Therefore, the Swedish fintech company Froda, in collaboration with Visa, has developed card-based embedded lending, a new type of integrated financing solution that uses card infrastructure for disbursements and repayments. The solution is offered as a white-label product through Froda Embedded to partners who are issuers of Visa corporate cards.

- It started with an idea and a sketch on a piece of paper over a year ago, and now it has become a reality thanks to the partnership with Visa and Lunar. We have had a strong demand for the solution among Danish entrepreneurs during the test period, which makes Denmark a natural next step in our journey, says Olle Lundin, co-founder and CEO of Froda.

The process for the product is fully digital and by using Visa cards for disbursements and repayments, the entire loan process can be shortened from the two months that has historically been standard, to a few minutes. The breakthrough ensures that small business owners have access to a solution that is both fast and efficient when they need financing.

- "We are constantly looking for new, innovative ways to use the card infrastructure, for example through strong partnerships. In collaboration with Froda and Lunar, we can digitize the entire loan process and ensure a fast and smooth process that benefits small businesses," says Philip Konopik, Regional Managing Director at Visa in the Nordics and Baltics.

Card-based embedded management was introduced earlier this year. With Visa's presence in over 200 countries, the product offers a unified experience regardless of market, making it globally scalable. With the launch in the Danish market, Lunar becomes the first partner to implement the product in its offering.

- Lunar will be the first to launch a brand new type of financing for small businesses in Denmark. It is easy to apply via our app and customers receive a non-binding offer within minutes. In addition, we offer an attractive price guarantee, which makes the product competitive and contributes to our goal of building the best everyday bank in the Nordic region, especially for small businesses," says Mats Persson Bergius, Head of Sweden at Lunar.

During the spring, a selected group of Lunar's Danish customers were given the opportunity to test a beta version of the product. The results were positive, with more than half of the customers showing great interest in the product.

- It's great to see so much interest in the product. It shows that there is a great need for innovative financing solutions. The partnership with Visa and Lunar has great potential and makes it possible to scale our offering in more markets," says Stella Snickare, VP of Froda Embedded.

The product will be available to all Lunar customers in Denmark from June 20th. Lunar is building the best everyday bank for private and corporate customers and aims to facilitate business activities in Denmark. The partnership with Visa and Froda aims to increase financing opportunities, especially for smaller businesses.

SME Denmark: https://smvdanmark.dk/analyser/temaanalyser/smver-er-rygraden-i-dansk-erhvervsliv

Lunar
Lunar is a digital challenger bank with the goal of making it easier for consumers and businesses to manage their finances by building the best everyday bank in the Nordic region. Lunar was founded in Aarhus and has around 450 employees in Copenhagen, Aarhus, Stockholm and Oslo. In 2019, Lunar received a Danish banking license and is now one of the few banks with a Nordic banking platform. Today, Lunar has more than 700,000 consumer and business customers across the Nordic region.

About Visa
Visa Inc. (NYSE: V) is the global leader in digital payments, offering transactions between consumers, merchants, financial institutions and governments in more than 200 countries. Our mission is to connect the world through the most innovative, trusted and secure payment network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone, everywhere, also lift up everyone, everywhere - and we see accessibility as fundamental to the future of transactions. Read more at Visa.se.

About Froda
Froda was founded in 2015 with a clear idea - give small and medium-sized businesses the same opportunities to grow as large ones. The company's service makes it easy and affordable for entrepreneurs to invest in their ideas. By digitizing the process, Froda has made it possible to help more companies with financing tailored to their unique business and its needs. A smarter business loan, simply put.

Today, Froda is one of Sweden's fastest growing fintech companies and has helped more than 50,000 companies grow. The company is a credit institution covered by the state deposit guarantee and is under the supervision of Finansinspektionen (FI).

Entrepreneurship in Sweden is declining and only 6% of the population are currently entrepreneurs. However, a new report produced by Froda shows that the entrepreneurial potential is great. More than half of all Swedes want to start a business and among young people, two-thirds dream of becoming an entrepreneur.

The report Driv is a survey of Swedish entrepreneurship and Swedes' attitudes towards entrepreneurship, their driving forces and perceived obstacles. The report is based on data from Statistics Sweden and over 6500 interviews with Swedes through a survey with Norstat. The report shows that the entrepreneurial spirit in Sweden is high and that there are over 4 million potential entrepreneurs in Sweden.

- In the report, we see that there is a big gap between wanting and doing, which shows that Sweden is missing out on great potential and needs to do more to promote entrepreneurship," says Olle Lundin, CEO of Froda.

The main drivers are linked to self-determination. Two thirds want to work on what they want, half want to plan their own time and four out of ten want to be their own boss. At the same time, fear of financial impact, failure and lack of knowledge are seen as the main obstacles. Women are more likely than men to say they are hampered by confidence, knowledge and finance, while men cite time and family situation as the main obstacles.

- Sweden must take advantage of the great interest that exists in running a business, especially now that we see that bankruptcies are increasing and new businesses are declining. The negative spiral needs to be broken. The fact that the influence of the economy is one of the biggest obstacles to taking the step and becoming an entrepreneur also shows that entrepreneurship is still to some extent a class issue," says Olle Lundin, CEO of Froda.

Entrepreneurship in Sweden is still dominated by men, the elderly and high-income earners. 68% of entrepreneurs are men, seven out of ten entrepreneurs have a higher disposable household income than the average Swede and 32% are aged 65 or over. The share of female entrepreneurs in Sweden is lower than the EU average and the trend does not seem to be reversed. The report shows that not only are fewer women than men running businesses today, but also that women are less likely to want to start a business.

At the same time, the report shows that there is a high level of entrepreneurship among foreign-born people in Sweden. A full 5 percent of all foreign-born people in Sweden are entrepreneurs, which is just below the national average of 6 percent. Foreign-born women stand out and are more entrepreneurial than native-born women with two native-born parents.

- "Unfortunately, there is still a challenge with diversity and inclusion in the business world. Therefore, it is particularly gratifying to see that there is a high level of entrepreneurship among foreign-born people," says Olle Lundin, CEO of Froda.

The report shows that economic conditions, a unique business idea and more knowledge about entrepreneurship would make more Swedes dare to take the step to start a business.

Read the report at: https://froda.se/rapporten-dri...

Facts from the report:

• 52% of the population have considered starting a business.
• 6% of the population runs a business. Of which 8% of men and 4% of women in Sweden are entrepreneurs.
• The main drivers are being able to work on what I want (63%), planning my own time (50%) and being my own boss (43%).
• Continued challenge related to gender equality where women are less likely than men to say they have considered starting a business and are also under-represented when it comes to being an entrepreneur. Two-thirds of all entrepreneurs are men.
• Women and younger entrepreneurs are held back by a lack of finance and confidence.
• The most common concern for entrepreneurs and non-entrepreneurs was how their personal finances and income would be affected. More than four out of ten would start a business if money were not an issue.
• The share of those who have considered starting their own business increases with household income. Among those with the lowest household income, 47% have considered starting their own business. Among those with the highest household income, the corresponding figure is 57%.
• Immigration is crucial for increasing the number of entrepreneurs. Just over one in six entrepreneurs in Sweden is foreign-born. There is a higher proportion of women among foreign-born entrepreneurs compared to domestic-born entrepreneurs with two domestic-born parents (35% vs. 31%).
• Among those born outside Europe, half highlight access to finance as one of the main obstacles.
• A quarter of Sweden's entrepreneurs are located in Stockholm and more than half are active in the three metropolitan counties. However, the proportion of entrepreneurs is highest in Gotland and Jämtland, where one in ten inhabitants is an entrepreneur (10%). Fewer are found in Blekinge, Södermanland, Västmanland, Örebro and Östergötland, where only five percent of the population are entrepreneurs.

What is the state of Swedish entrepreneurship?
Six percent of the Swedish population are entrepreneurs, of which 8 percent of men and 4 percent of women are entrepreneurs. This means that two out of three entrepreneurs in Sweden are men.

A quarter of Sweden's entrepreneurs are in Stockholm and more than half are active in the three metropolitan counties. However, the proportion of entrepreneurs is highest in Gotland and Jämtland, where every tenth inhabitant is an entrepreneur. On the opposite side of the spectrum, Blekinge, Södermanland, Västmanland, Örebro and Östergötland have half as many entrepreneurs and only five percent of the population are entrepreneurs. Women and people with a foreign background are underrepresented when it comes to being entrepreneurs. Two thirds of all entrepreneurs are men and three out of four entrepreneurs are native-born with two native-born parents.

How the report is made:
The Driv report is published by Froda, and is based on Statistics Sweden's register-based labor market statistics (RAMS) in 2021 and a survey via Norstat's nationally representative web panel that includes 6,511 respondents. The survey was conducted in February 2023.

Entrepreneurship is an important part of Swedish society and the report aims to provide a deeper understanding of what drives entrepreneurs to start businesses and what barriers prevent others from doing the same.