Business Loans Finland – Compare Business Credit

“Business financing” (yritysrahoitus) is an umbrella term for external funding a company can raise. The most common debt-based forms differ in flexibility and purpose:

• Business loan (yrityslaina) – a lump sum with a fixed repayment schedule. Suits larger, planned purchases such as equipment or premises.
• Business credit (yritysluotto) – a flexible credit, drawn at once or in parts; often used as a synonym for a business loan.
• Business credit limit (yrityslimiitti) – a revolving limit you draw from as needed, paying interest only on the used amount. Ideal for working capital and cash-flow gaps.
• Invoice financing (factoring) – get the cash from your sales invoices immediately instead of waiting for the due date.

Don’t compare the nominal interest rate alone. When comparing business financing offers, check:

• APR – includes interest and fees, showing the true cost.
• Handling and account fees that add to the total.
• Repayment term and flexibility, including early repayment.
• Collateral and personal guarantee requirements.

A new company can also get financing, though without a trading history lenders assess risk more closely and a personal guarantee is common.

Business credit is financing granted to a company rather than to a private person. It covers several products — a term loan for investment, a credit limit for working capital, invoice financing against receivables, and leasing or hire purchase for equipment — that differ in what they are secured against and how quickly they are repaid.

The decisive legal point is this: consumer protection legislation does not apply. There is no interest rate cap, no 14-day right of withdrawal, and no obligation to present the price as an APR in the same way. Whatever protection exists comes from the agreement itself, which is why the terms must be read rather than skimmed.

In practice a small company's credit often also involves a personal guarantee from the entrepreneur. That moves the risk into private finances, and it does not disappear if the company does. It is the single clause most worth weighing before signing.

Even without consumer protection, several figures are fixed by legislation and are worth knowing before negotiating.

What short-term financing really costs: if a €10,000 invoice is sold to a finance company for a 2.5% fee when 30 days of payment term remained, the cost is €250. Annualised, that corresponds to roughly 30%. Short-term finance is therefore expensive on a yearly basis even when the euro amount looks small. This is our own calculation, not any financier's price list.

Source: Finlex — Act on Payment Terms in Commercial Contracts 30/2013, Consumer Protection Act 38/1978; Finnvera (finnvera.fi), PRH (prh.fi). Checked 4 August 2026.

Business finance is not one product but a set of tools that solve different problems. Choosing the wrong tool is expensive: a long-term investment should be financed with long-term debt, not with an expensive short-term limit.

Business loan

A one-off loan drawn in full and repaid on an agreed schedule. It suits investments: machinery, equipment, premises, acquisitions. Terms usually run one to ten years, with the rate tied to euribor plus a margin.

Business credit limit

A revolving limit on the company account. Interest accrues only on the drawn amount and the limit stays available after repayment. It suits smoothing seasonality and timing differences in cash flow — not permanent financing.

Invoice finance (factoring)

Trade receivables are turned into cash before the due date. The financier pays typically 80–90% of the invoice immediately and the rest once the customer pays. It suits a company with long payment terms and reliable customers. The cost is usually a percentage of the invoice value.

Hire purchase and leasing

A machine, device or vehicle is financed with the asset itself as security. Under leasing the asset never becomes owned, which affects both the balance sheet and the tax treatment.

One principle guides the choice above all others: match the duration of the finance to the duration of the thing being financed. A three-month cash gap is bridged with a limit; a ten-year machine with a ten-year loan. When this principle is broken, problems appear not immediately but a couple of years later, when repayments have grown faster than cash flow.

Typical cost levels and use cases. Figures are general market ranges, not an offer from any financier.

Invoice finance looks cheap in the table, but that percentage is of the invoice — not an annual rate. With a 30-day payment term, a 2% charge translates into a considerably higher annualised cost. Comparison must therefore be made in euros and over the same period.

Business finance falls outside chapter 7 of the Finnish Consumer Protection Act, so the 20% interest rate cap and the consumer’s 14-day right of withdrawal do not apply. An entrepreneur’s protection rests on contract law and on their own diligence, which is why the terms deserve especially close reading. Consumer products are covered separately on our consumer loan page.

Collateral matters more in business finance than in consumer credit, because a small company’s balance sheet does not always hold realisable assets.

Business mortgage

A business mortgage covers the company’s movable property: machinery, equipment, inventory. It is the most common form of security in an SME loan.

Personal guarantee

Financiers frequently ask the entrepreneur for a personal guarantee, especially from a young or small company. This is the decisive clause: a personal guarantee removes the limited liability protection of a limited company for that debt. If the company does not pay, liability moves to the guarantor’s personal assets.

Limiting a guarantee

A guarantee is not all-or-nothing. It can be limited in amount, in time or to a specific debt. An unlimited general guarantee also covers future debts to the same financier, which is a far broader commitment than most assume at signing. Ask for the guarantee to be limited in writing and check whether it lapses automatically once the debt is repaid.

Real security and unsecured lending

Property as collateral lowers the rate substantially. If the collateral is the entrepreneur’s own home, the risk is the same as with a personal guarantee — and more concrete. Unsecured business finance exists, but rates are clearly higher and amounts smaller; it is justified when the need is short and the expected return clear.

Before giving a personal guarantee, calculate what its realisation would mean for your own finances. That is the true price of the finance in the scenario where things do not go to plan.

Company credit assessment leans on numbers and history more than on an individual’s situation.

What the financier looks at

• Turnover and its trend over recent financial years.
• Profitability — EBITDA and operating profit say more about capacity than turnover does.
• Equity ratio and existing debt.
• Cash flow and how predictable it is.
• Payment defaults of the company and its responsible persons.
• Industry and company age — a company under two years old is a higher risk.
• Tax debt and whether filings are up to date.

A start-up company

Without financial statements the assessment rests on the business plan, forecasts and the entrepreneur’s own background. Public financing instruments and guarantee schemes are worth exploring before commercial finance, because they are designed for exactly this stage.

What strengthens an application

Up-to-date bookkeeping, a recent interim report, a clear stated purpose and a realistic repayment plan. An application that says what the money is for and where repayment comes from is processed both faster and on better terms.

LuottoBotti does not carry out credit assessment and does not pass information to financiers. Offers shown here are advertisements. For personal borrowing the assessment logic is described in our guide on the credit decision, and pricing limits in the guide on the interest rate cap — neither of which applies to business finance in the same way.

Before seeking finance, be clear about which problem you are solving. Finance fixes a timing problem; it does not fix a profitability problem.

A cash-flow problem

The company is profitable, but money comes in later than it goes out. Typical causes are long payment terms, seasonality and the working capital tied up by growth. Finance — a limit or invoice finance — is the right tool here.

A profitability problem

The company is loss-making: gross margin does not cover fixed costs. Finance moves the problem forward and enlarges it by the cost of interest. The solution lies in pricing, cost structure or the business model.

How to tell them apart

A simple test: if every trade receivable were paid tomorrow, would the situation be fine? If yes, it is cash flow. If no, it is profitability. A second test is to look at EBITDA over the last twelve months — a negative figure is not repaired by a loan.

A third possibility: a structural problem

Sometimes it is neither, but the shape of the balance sheet: long-term investments financed with short-term debt, so repayments consume cash faster than the investment produces it. The remedy is refinancing rather than more finance — consolidating short debts into a longer loan whose schedule matches the return profile of the investment. It does not reduce the debt but moves the payments to the right place on the timeline, and timing is what decides a cash crisis.

Most SME finance needs concern working capital rather than investment. Working capital is the money tied up in running the business: inventory, receivables and prepayments, less trade payables.

Why growth consumes cash

A growing company needs more inventory and carries more open receivables. Both tie up money before sales convert into cash. A fast-growing, profitable company can therefore run into a cash crisis — a feature of growth rather than a sign of a bad business.

Shortening the working capital cycle

Before seeking finance, check whether the cycle can be shortened without money:

• Invoice faster. A week’s delay in invoicing is a week’s delay in cash.
• Review payment terms. A 30-day term ties up half as much money as a 60-day term.
• Advance payments from new or large customers.
• Inventory turnover. Slow-moving stock is money on a shelf.
• Trade payable terms with your own suppliers.

How large a limit is needed

If the shortfall is caused by a single vehicle or machine rather than by the cycle itself, a car loan or hire purchase is a cheaper answer than a limit. A simple sizing method: take the peak monthly cash shortfall over the past twelve months and add a 20–30% safety margin. A larger limit costs money for nothing; a smaller one fails to solve the problem exactly when it is needed.

Prices in business finance vary more than in consumer credit, because pricing is company-specific. Comparing is almost always worthwhile.

Request offers on identical information

Give every financier the same material: financial statements, an interim report, a cash-flow forecast and a description of the purpose. Only then are the offers comparable.

Compare total cost, not the rate

Arrangement fees, account fees, drawdown fees and the costs of arranging security can turn the apparently cheapest offer into the most expensive. Ask for an offer with all costs itemised in euros.

Points to negotiate

• Margin and arrangement fee.
• The scope of the collateral requirement — particularly the need for and size of a personal guarantee.
• An initial repayment holiday if the investment produces only later.
• Terms for early repayment.
• Covenants, meaning contractual conditions the company must observe.

Covenants deserve separate attention

Larger business loans often include ratio conditions, for example a minimum equity ratio. Breaching one can make the loan fall due. Read them and size them realistically against the normal variation in your business.

How long processing takes

A small unsecured business credit is usually resolved in one to three business days when the material is ready. A secured business loan takes a week to a few weeks, because the collateral has to be valued and registered. Plan the timetable so that you are not waiting for a decision when the money has already run out — finance is far easier to obtain when it is not yet strictly needed.

A small entrepreneur sometimes faces a choice: apply in the company’s name or their own. The difference is material.

Why in the company’s name

• Interest is a deductible expense for the company.
• Liability is in principle limited to the company, unless a personal guarantee is given.
• The finance appears in the company’s credit history and builds it.
• Amounts can be larger than in consumer credit.

Why sometimes in your own name

For a new or very small operation, consumer credit may be the only realistic option. If so, know what you are choosing: the rate is usually higher, interest is not deductible for a private individual, and liability is entirely personal.

Mixing the two is risky

Financing company costs with personal credit cards or quick loans blurs the finances and is expensive. If this becomes a repeated pattern, the issue is usually profitability rather than access to finance.

Personal options are described on our consumer loan and flexible credit pages. They are, however, intended for household needs rather than for financing a business, and a consolidation loan is the right tool if personal credits have already accumulated.

A well-prepared application is processed faster and on better terms. Gather these documents before the first contact.

• The two most recent financial statements with notes.
• A recent interim report or up-to-date profit and loss account and balance sheet.
• A cash-flow forecast for twelve months, by month.
• An explanation of the purpose and its effect on results.
• A repayment plan based on cash flow rather than hopes.
• Details of existing finance and collateral.
• Proof that tax obligations are in order.

The most common reasons for a refusal

1. Tax debt or neglected filings.
2. A payment default entry for the company or a responsible person.
3. Negative equity without a credible plan to correct it.
4. An unclear purpose.
5. Industry risk combined with a short history.

Before signing

• Can the loan be repaid early and at what cost?
• What happens if one instalment is late?
• Is the scope and duration of any personal guarantee limited in writing?

Go through the decision with an accountant or another professional and assess repayment capacity calmly — particularly where personal liability is involved. Most refusal reasons are fixable in advance: a payment plan for tax debt, up-to-date bookkeeping and a clear rationale change the character of an application entirely. Offers shown here are advertisements, and the financier confirms the final terms.

In business finance the quality of the application affects the decision more than it does on the consumer side. The financier assesses the business, and that means documents.

One document separates approved applications from rejected ones more often than any other: a cash-flow forecast that shows where repayment comes from and on what assumptions. A forecast in which sales rise without explanation reads as risk, not as a plan.

Unsecured financing carries a higher rate but leaves less personal exposure. Weigh the personal guarantee separately — it is a commitment that outlives the company.