Almi Business Loans
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All About ALMI Corporate Loans
Are you 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 out all the data and guide you through the jungle of tasks — what it costs, how much to borrow, what it takes and how best to make an application.
What is ALMI?
The name Almi is not, as many believe, an abbreviation, but comes from the Latin word Almus, which means growing, nourishing, fruitful. This is a good fit because Almi's mission is precisely to nurture Swedish growth by supporting Swedish small businesses.
ALMI does this by providing funding in combination with advice. The parent company Almi Företagpartner AB is owned by the state and financed with tax money.
In total, ALMI lent around 3,200 million in 2020 to about 2,000 companies (average loans approx. SEK 1.6 million), of which almost 70% went to small businesses with fewer than 10 employees. The most common borrowing needs were to invest in machinery and employees or for working capital. The largest number of borrowers was in commerce.
Almi's mission is to create growth and innovation in the business world through funding combined with consulting. The goal is that more innovative ideas are successfully commercialized, that more viable companies are started and developed, and that more companies increase their competitiveness and growth.
Almi Företagpartner AB has 16 regional subsidiaries and venture capital activities in Almi Invest AB. The regional subsidiaries are 51 per cent owned by the parent company and 49 per cent by regional owners, other than the county council.
What is ALMI Business Loans?
ALMI has a couple of different financing types, but “ALMI business loans” are the most common type of business loans and are aimed at SMEs with up to 250 employees in all industries. The idea is to support development in the company. The loan amounts are normally from SEK 250,000 up to several million SEK, and the maturities are usually 3-5 years with straight amortization.
However, a common practice for many companies is that ALMI does not want to finance your business alone, but usually wants to take the back of a bank or lender. For example, if the company borrows 1 million from the bank, ALMI can enter with the corresponding amount and with corresponding conditions, but with a slightly higher interest rate. Thus, you must already have or obtain 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 key rate plus 5-9%. The company must provide security in the form of a business mortgage and normally the owners must also provide a personal guarantee or maintenance guarantee as collateral for the loan.
ALMI also has a couple of other types of business loans that can be suitable if the usual business loan does not work.
ALMI Microloans
Almis Microloans are suitable for starting businesses or if you are a young entrepreneur.
Which companies are allowed to borrow? The loan is aimed at new small businesses or companies that are in start-up. 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 as much as 100% of the company's capital needs. In other words, you do not have to put in a single penny and can start businesses without capital.
What is the cost of the business loan? It all depends on the risk in the company. But normally the interest rate is higher than ordinary bank loans.
ALMI charges a setup fee of SEK 500. Normally, you will have to provide personal bail, but only on 10% of the loan amount. The payback period can be up to 6 years.
ALMI Growth Loans
Which companies are allowed to borrow? The growth loan is mainly aimed at innovative small and medium-sized companies that have some type of idea that will create growth in the company.
How much can I borrow? ALMI Growth Loans are corporate loans of SEK 250,000 and above. The idea is not to cover the entire company's financing needs, but to complement other financing from, for example, the bank or from the owners or other venture capital. Here we at Qred can help you with the complement that Almi often requires.
What security is required? As a rule, a corporate mortgage and sometimes a guarantee are required as collateral for ALMI's Growth Loans.
How much does it cost? The term can be as long as 10 years. The interest rate on the loan depends on the risk in the company, where small and start-up companies pose a higher risk. The interest rate is also higher than the regular bank rate.
ALMI Innovation Loan
This is a loan that is intended for start-ups that want to develop a product or idea, but have not yet come to break-even. ALMI can enter with up to 50% of the capital, but at least SEK 50,000. The remaining capital must come from, for example, owners, banks or venture capital.
ALMI conducts a credit check of the company before a loan can be granted. It is not clear what collateral is required, what the loan will cost or at what time 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 annum. Ordinary banks (e.g. Swedbank) requires personal guarantee on the loan, Almi does not. The high interest rate is to compensate for the significantly higher risk they are taking. The experience of ALMI is that they rarely go in more than 50%. That means you have to find 50% somewhere else.
How much does ALMI's corporate loan cost?
The cost of a business loan from ALMI is normally relatively high compared to a bank loan, but ALMI works in a high-risk segment. According to Ekot, ALMI's interest rates range between five and nine per cent, the rate is sometimes much higher than that. The levels are justified by Almi with the fact that they do not want to compete in price with the commercial banks. However, ALMI does not provide exact interest rate data.
Entrepreneurs' chief economist Daniel Wiberg has written about ALMIs ALMI's business loan costs, but it should be remembered that ALMI's job is to supplement the market by offering risk-averse loans when no one else is doing so.
How to apply for ALMI business loans?
Applying for ALMI's corporate loan usually takes at least a month. Be patient, prepare carefully and be prepared for some paperwork before you have received the money.
The most important parts of your application are
Loan application — In the loan application, you fill in details about your company, 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 up and running. In the business plan, you will take a position on the company's strategies in various areas.
Budgets — You need to submit a detailed earnings and liquidity budget. On ALMI's website you can find templates for how it should look.
Once you submit your loan application, ALMI goes through it and takes a credit report. After that, they will contact you if you need to complete your application. In total, it usually takes a month or a couple of months before you have the money in your account.
On the site driva-eget.se there are many tips to read about Almi.
Questions and answers about business loans from Almi
- How do interest rates and fees differ between Qred's corporate loans and ALMI's corporate loans?
Interest and Fees for Qreds business loans compared to ALMI's corporate 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 rating. ALMI, on the other hand, offers loans that are often subsidized and have a lower interest rate, but with stricter requirements for the collateral and scope of use of the loan.
- What types of collateral are typically 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 collateral to reduce the risk involved with the loan. This can range from personal surety obligations to corporate mortgages, depending on the loan amount and the financial condition of the company. Qred, which focuses on a simplified application process, may not require traditional collateral in the same way a bank does, but this can be offset by higher interest rates or fees.
- How does the size and scope of business of a company affect the chances of getting a loan with Qred compare to ALMI?
A company's size and scope of operations can definitely affect its chances of getting a loan, both at Qred and ALMI. Small and medium-sized enterprises in the growth phase may find Qred's solutions particularly attractive due to 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 industry.
- Can companies that already have a loan with another financier apply for additional funding with Qred, and how does that affect the assessment?
Companies that already have loans 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 funding structure can be seen as positive, as long as it does not jeopardise the financial health of the company.
- Are there any specific industries or types of businesses that Qred specifically targets, or that have better chances of getting loans approved?
Finally, when it comes to specific industries or types of businesses that Qred specifically targets, financial companies and banks tend to be open to a broad category of activities. However, some industries may be considered to be at higher risk, which may affect the assessment of loan applications. It is always best to contact the lender directly to get clarity on how your particular company's industry and specific situation may affect loan opportunities.
- What interest does Almi have?
Almi mainly offers three different loans. Many of their customers who have taken these loans and share our insights on Almis microloans, Almis bridge loans and Almis innovation loans. Almi's interest rate is approximately 10-12%.
