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 in 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 total 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 and advertising
• running costs, such as rent, telephone  and office supplies

Business set-ups are normally financed by means of

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

Your own funds might not always be sufficient. If this is the case, you can 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.

The bank conducts an overall assessment

It’s important that the bank has confidence in you as a customer, and believes that you have the ability to pay back the loan. Your personal finances may affect your chances of securing a good loan. Review your business plan to ensure you have a sound basis when presenting your business. Many banks today also ask about a business’ sustainability work. This enables them to assess the potential for growth and see how aware the business is of any risks. Some banks offer lower interest rates for sustainable investments.

More and more businesses are publicising their sustainability work, so it’s essential that you can back up your statements. In other words, you must be able to explain how a product is “climate-smart” if your business states this in its communication. 

Almi financing

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

Almi financing (in Swedish)

Almi Micro loan

Micro loans are suitable for entrepreneurs with smaller capital requirements and are primarily aimed at those wanting to start a business, and to young entrepreneurs. Unlike the company loan, no co-financier is required for the micro loan. Almi may lend up to 100 % of the capital requirement up to SEK 200,000 without security.

Almi Invest

Almi Invest are a public venture capital company in Sweden. It is owned by Almi and is partly financed by them, as well as the EU and regional organisations. It aims to bridge private equity with Swedish startups in order to contribute to a functional equity market in Sweden.

Almi Invest as a start up investor

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.