Financing your start

After that, the day-to-day operations in the business will be funded from sales revenue.

Your own funds and hard work

Although it may be some time before you can take out a fixed salary, the bills will continue to come in as usual. This is why it is important to get through the initial period without income. You can do so by using savings, getting an extra job or staying on in your old employment during your start-up, perhaps on a part-time basis. The vast majority of entrepreneurs start their business using their own funds and hard work.

Calculate your personal costs

Try to estimate how much money is needed to set up your business and cover your running operational expenditure over a six-month period. At the same time, you need to work out your personal costs so that you have enough money left to live on.

When you start a business you may need money for

• machinery and equipment
• marketing, such as advertising and brochures
• running costs, such as rent, telephone, office supplies.

Business set-ups are normally financed by means of

• own funds
• loans from the bank or ALMI
• credit from suppliers (with better payment terms, for example)
• advances from customers (ask for early payment)
• operating loans from the bank, normally a small overdraft facility to cover fluctuating cash flows.

Bank loan

Your own funds are not always sufficient. If this is the case, contact a bank or other lender. The estimated risk in your business concept largely determines how much you can borrow and what security will be required for the loan to be granted.

Almi Company loan

You can apply to Almi for a company loan. ALMI Företagspartner AB is owned by the state and offers financing and business development to small and medium sized entreprises. The combination of an Almi loan and your own financing or bank loan can give you access to more capital.

Almi Micro loan

Micro loans are suitable for entrepreneurs with smaller capital requirements. Unlike the company loan, no co-financier is required for the micro loan. Almi may lend up to 100 per cent of the capital requirement up to SEK 250,000 without security.

EU/public financing

Public backers such as the EU and various authorities may offer partial financing of projects under certain circumstances. The purpose may be to achieve a certain result or develop the market in areas where it does not function satisfactorily.