An overview of the current Swedish Loan Market
European nations are beginning to open up their shops for business following a devastating 3-4 months of lockdown, but what sort of measures were put into place as far as corporate loans to SMEs to not only survive but also potentially thrive. With many banks not advising customers to visit in person and others being shut altogether, the only blessing in disguise was the fact that most EU nations were using digital platforms to operate their business and some in Sweden may choose to use online sites such as Sverigekontanter.se to explore their choie of lenders.
In March, Swedish central bank launched a 500b kronor loan package for the country's banks that will ensure the availability of credit to help SMEs bounce back from the doom of the lockdown. In addition, companies were also able to delay their payment of tax and VAT for up to a year, this measure in itself would have cost the Swedish government up to 300 billion Swedish crowns in the short term, according to Finance Minister, Magdalena Andersson. Speaking back in March, Andersson said: “This is a completely unique situation for the Swedish economy, we want this decision to mean that as many companies as possible get through this crisis so that we can protect Swedish companies and Swedish jobs.” It might be coincidental, but just last month we reported on how the Swedish kronor did very well against the US dollar at the height of the pandemic.
Furthermore, as of June 2020, the European Investment Bank (EIB) Group is set to trigger investment of €14.3b euros in Swedish SMEs with €3.8b euros already approved. One such investment includes a €350m euros loan to Northvolt, which is planning to build the first European gigafactory for lithium-ion battery cells, Northvolt Ett, in Sweden. This loan will no doubt be a safe bet as more and more countries such as France and the UK are joining the Nordics when it comes for a push for a green automotive industry. According to the EIB report, the gigafactory is set to be constructed in Skellefteå, northern Sweden and use 100% renewable energy within its production processes.
This also happens to be the first time that the EIF support isn’t just for state-sponsored lenders with private Swedish lending body DBT Företagslån (DBT) also benefiting from this guarantee agreement that will enable DBT to lend up to €80 million to SMEs in Sweden.
Speaking about this stimulus, Jyrki Katainen, European Commission Vice-President responsible for Jobs, Growth, Investment and Competitiveness, said: “Thanks to this financing agreement with DBT, Swedish companies wishing to scale their business or expand their production capacity have another source to apply to for financial support. Thanks to the Investment Plan’s backing of the European Investment Fund, already more than 10,000 SMEs in Sweden can benefit from loans at favourable terms.”
With the Swedish SMEs having to adapt to their new reality, it is somewhat of a relief both financially and psychologically that there are loans available to sustain and hopefully build their companies.
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