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Financing your start

In the early days, before sales get under way, you will need start-up capital for your business.

Start-up grant

If you are a jobseeker and have what it takes to run a company you may be eligible for a start-up grant from the Swedish Public Employment Service (Arbetsförmedlingen) to start a business. The support is provided for six months.

Enterprise start-up support is for those who want to start up a business, alone or together with others. The prerequisite for receiving the support is that your business concept has the potential to be profitable and will provide you with a long-term income. You cannot be granted the support if the business you are going to run is in an industry where it is difficult for employers to find skilled workers.

Start-up grant - at the Swedish Public Employment Service

In the first instance, it is the owner of the business who must bear the financial risk by investing their own funds. The size of your own investment is often crucial.

If you cannot finance the start-up with your own money, you will need to turn to a financier. The forms and conditions of financing vary, but can generally be divided into

  • bank loans
  • venture capital
  • business angels
  • public funding
  • crowdfunding

Bank loan, venture capital or grant? Listen to a podcast on financing forms

Podcast on forms of financing at Venture Cup (length: 24:56 minutes) (in Swedish)

It may take some time for you to receive income from your business, while the bills continue to come in as usual. That is why it is important to be able to get through the initial period with little or no income. You can do this by using saved capital, getting an extra job or staying in your old job while you start your business, perhaps part-time.

Try to get an idea of how much money you will need in start-up capital for your business and your running costs to run the business over a six-month period. At the same time, you need to factor in your personal costs so that you have money left over to live on.

Think about what is best for you and your business

When choosing a particular type of financing for your business, whether internal or external, you should consider the different alternatives and their implications for your business. There is a lot you can do on your own by looking after your customers and suppliers, keeping costs down and using your contacts.

If you choose to raise external capital, it may mean that your own say in the company and its operations is reduced. All loans must be paid back. Pledging security to the lender always means taking a risk with the company's finances or with your own personal finances.

Also, do not underestimate the time and effort it takes to raise external capital. Financiers often place very high demands on your application and the reporting of how the money has been spent.

People who invest capital in limited companies and economic associations have the possibility of making what is known as an investor deduction of half the amount invested, up to a maximum of SEK 650,000.

Investor deductions on the Swedish Tax Agency's website (in Swedish)