Almi business loans

All about ALMI Business Loans

Areyou considering a business loan from ALMI? We have the complete guide to help your business get a loan from ALMI.

Are you thinking of applying for a business loan from ALMI? ALMI can be an excellent alternative and a complement to other types of financing. We've dug up all the details and will guide you through the jungle of information - what it costs, how much you can borrow, what is required and how best to apply.

What is ALMI?

The name Almi is not an abbreviation, as many believe, but comes from the Latin word Almus, which means growing, nourishing, fertile. It's a good fit because Almi's mission is precisely to foster Swedish growth by supporting Swedish small businesses.

ALMI does this by providing financing combined with advice. The parent company, Almi Företagspartner AB, is owned by the state and financed by taxpayers' money.

In total, ALMI lent around 3 200 million SEK in 2020 to around 2,000 companies (average loan around 1,6 million SEK), of which almost 70% went to small businesses with fewer than 10 employees. The most common loan needs were to invest in machinery and employees or for working capital. Most borrowers were in the trade sector.

Almi's mission is to create growth and innovation in the business sector through financing combined with advice. The aim is to successfully commercialise more innovative ideas, to start and develop more viable businesses and to increase the competitiveness and growth of companies.

Almi Företagspartner AB has 16 regional subsidiaries and venture capital operations in Almi Invest AB. The regional subsidiaries are 51% owned by the parent company and 49% by regional owners, including county councils.

What is an ALMI business loan?

ALMI has a few different types of financing, but the "ALMI business loan" is the most common type of business loan and is aimed at small and medium-sized enterprises with up to 250 employees in all sectors. The idea is to support the development of the company. Loan amounts typically range from SEK 250,000 up to several million, and maturities are usually 3-5 years with straight repayments.

However, a common occurrence for many companies is that ALMI does not want to finance your company alone, but usually wants to take the backing of a bank or lender. For example, if your company borrows 1 million from a bank, ALMI can provide the same amount and on the same terms, but at a slightly higher interest rate. In other words, you must already have or have obtained a bank loan in order to obtain a business loan from ALMI.

As far as we know, the interest rate on ALMI business loans is normally the policy rate plus 5-9%. The company must provide collateral in the form of a company guarantee and normally the owners must also provide a personal guarantee or management guarantee as security for the loan.

ALMI also has a few other types of business loans that may be suitable if the usual business loan does not work.

ALMI Micro loans

Almis Micro loans are suitable for new business start-ups or if you are a young entrepreneur.

Which companies can borrow? The loan is aimed at new or start-up small businesses. The loan is also suitable for young entrepreneurs up to 25 years old.

How much can I borrow? You can borrow up to SEK 200,000 and 100% of your company's capital needs. In other words, you don't have to put in a single penny and can start a business without capital.

How much does the business loan cost? It all depends on the risk of the company. But normally the interest rate is higher than normal bank loans.

ALMI charges a set-up fee of SEK 500. Normally, you must provide a personal guarantee, but only for 10% of the loan amount. The repayment period can be up to 6 years.

ALMI Growth Loans

Which companies can borrow? The Growth Loan is aimed primarily at innovative small and medium-sized enterprises that have some kind of idea that will create growth in the company.

How much can I borrow? ALMI Growth Loans are business loans of SEK 250,000 and above. The idea is not to cover the company's entire financing needs, but to complement other financing from the bank, for example, or from the owners or other venture capital. At Qred, we can help you with the complement that Almi often requires.

What security is required? Normally, ALMI's Growth Loans require a corporate guarantee and sometimes a surety as security.

How much does it cost? The term can be up to 10 years. The interest rate on the loan depends on the risk of the business, with small and start-up businesses presenting a higher risk. The interest rate is also higher than normal bank rates.

ALMI Innovation Loan

This is a loan designed for start-ups that want to develop a product or an idea, but have not yet reached break-even. ALMI can contribute up to 50% of the capital, but at least 50 000 SEK. The remaining capital must come from e.g. owners, banks or venture capital.

ALMI carries out a credit check on the company before a loan can be granted. It is not clear what collateral is required, how much the loan will cost or when it will be repaid.

What is the interest rate on ALMI business loans?

There are no exact statistics on what the interest rate is, but typically it is 5-9% per year. Usual banks (e.g. Swedbank) require a personal guarantee on the loan, Almi does not. The high interest rate is to compensate for the much higher risk they take. The experience of ALMI is that they rarely go in for more than 50%. That means you have to find 50% elsewhere.

How much do ALMI business loans cost?

The cost of a business loan from ALMI is normally relatively high compared to a bank loan, but ALMI operates in a high-risk segment. According to information provided to Ekot, ALMI's interest rates are between five and nine per cent, but are sometimes much higher than that. The levels are justified by Almi on the grounds that they do not want to compete on price with the commercial banks. However, ALMI does not provide precise interest rate information.

Daniel Wiberg, Chief Economist at the Federation of Swedish Enterprises, has written about ALMI's costs for business loans, but it should be remembered that ALMI's task is to complement the market by offering risky loans when no one else does.

How do I apply for an ALMI business loan?

Applying for an ALMI business loan usually takes at least a month. Be patient, prepare carefully and be prepared for some paperwork before you receive the money.

The main elements of your application are

Loan application - In the loan application, you fill in details about your business, how much you want to borrow and how the loan will be used.

Business plan - In the business plan you describe how you intend to work with your company - whether it is a start-up or already running. In the business plan, you consider the company's strategies in different areas.

Budget - You will need to submit a detailed profit and loss and cash flow budget, templates for which can be found on the ALMI website.

Once you have submitted your loan application, ALMI will review it and carry out a credit check. They will then contact you if you need to complete your application. In total, it usually takes one or two months before you have the money in your account.

The website driva-eget.se contains many tips about Almi.

Questions and answers about business loans from Almi

1. How do interest rates and fees differ between Qred's business loans and ALMI's business loans?
   The interest rates and fees for Qred's business loans compared to ALMI's business loans vary depending on several factors, including the company's creditworthiness, loan amount and maturity. Qred focuses on offering fast and flexible loans with a simple application process, often with a slightly higher interest rate to compensate for the quick access to capital and the lower credit check. ALMI, on the other hand, offers loans that are often subsidized and have a lower interest rate, but with stricter requirements on collateral and use of the loan.
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2. What types of collateral are usually required to qualify for a business loan with Qred?
   When it comes to the types of collateral required to qualify for a business loan with Qred, finance companies usually require some form of security to reduce the risk of the loan. This can range from personal guarantees to business mortgages, depending on the amount of the loan and the financial position of the business. Qred, which focuses on a simplified application process, may not require traditional collateral in the same way that a bank does, but this may be offset by higher interest rates or fees.
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3. How does a company's size and area of operation affect its chances of getting a loan with Qred compared to ALMI?
   A company's size and area of operation can definitely affect its chances of getting a loan, both with Qred and ALMI. SMEs in the growth phase may find Qred's solutions particularly attractive because of the fast processing time and flexibility. ALMI, on the other hand, may be more inclined to support companies based on their potential for innovation and growth, regardless of the industry.
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4. Can companies that already have a loan with another financier apply for additional financing with Qred, and how does this affect the assessment?
   Companies that already have a loan with another financier can absolutely apply for additional financing with Qred. However, the assessment will take into account the company's overall indebtedness and ability to handle additional repayments. A well-diversified financing structure can be seen as positive, as long as it does not jeopardize the company's financial health.
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5. Are there any specific industries or types of businesses that Qred specifically targets, or that have a better chance of getting loans approved?
   Finally, in terms of specific industries or types of businesses that Qred specifically targets, finance companies and banks tend to be open to a broad category of businesses. However, some industries may be considered higher risk, which may affect the assessment of loan applications. It's always best to contact the lender directly to get clarity on how your company's industry and specific situation may affect the possibility of a loan.
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6. What is Almi's interest rate?
   Almi mainly offers three different loans. Many of their customers who have taken these loans and share our insights on Almi's microloans, Almi's bridge loans and Almi's innovation loans. Almi's interest rate is around 10-12%.