Dealing with financing

What you need to know when dealing with finances

Starting a company requires some capital – big or small – depending on the type of business. If you plan to live solely on your business, you will need some funds for the establishing costs and for surviving until you begin to make a profit. Many businesses fail because they underestimate how much they actually need to both start off in a good way and keep business running during the first critical phase. When it comes to financing start by asking yourself:

1.     How much does your company need to make for you to cover both your private and your         business’ cost?  

2.      Do you have your own money to fund your business?

If you are not able to set aside your own money, there are multiple ways of financing but beware that each have their pros and cons, and that the options you have depends on the type of business you want to start. We have focused on presenting the types of financing that are most common for small businesses in the Nordics.

We hope you will find the funding concept most beneficial for your company.

What do you need financing for?

When do most small businesses and new companies seek funding? Well, it all depends on the type of business in question. Carefully consider, why your business needs funding, before taking the next step to ask for it.

Your Business Plan and your budget are valuable tools for determining how much you need for what and when. And these documents are also something your potential financing partners will ask you to provide.

Money bag with arrows icon white 640x360Yrityksen perustaminen

Joskus tarvitset rahaa tehdäksesi rahaa, ja meiltä voit hakea myös lainaa yrityksen perustamiseen.

Chart graph icon - 640x360Tuotantokapasiteetti

Tarvitsetko rahoitusta tuotannon lisäämiseksi? Yityslaina uudelle yritykselle on yksi monista vaihtoehdoistasi.

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Saatat tarvita rahaa tuotekehittelyyn. Lue alhaalta lisää eri rahoitusmallleista.

Download app 640x360Markkinointi

Pohdi, mitkä markkinointikanavat ovat sinulle tehokkaimpia, mutta kustannuksiltaan kohtuullisia.

Globe icon - 640x360Uudet markkinat

Yrityslaina uudelle yritykselle voi auttaa sinua astumaan menestyksekkäästi uusille markkinoille.

Apartment blocks - 640X360Uudet toimitilat

Voit tarvita rahoitusta, kun yrityksesi vaatii uudet toimitilat.

Notepad icon - 640x360Päivittäinen liiketoiminta

Saatat tarvita rahoitusta kattaaksesi kuluja väliaikaisesti, tai isomman yrityslainan uuden yrityksen laitehankintoihin.

Financing options

Below we have selected different ways of financing a newly founded business. For each option we are giving you what we consider the pros and cons to get you up to speed. As a general rule, the more you want to scale up your business, the further down the list you may want to go – but this depends very much on the type of financing (and the amount) you get from either of the financing options. 

Also keep in mind that you can use many of the financing options in combination and that banks can partner with you in different ways along your journey.

Family, friends and peers
Public funding
Bank financing
Professional investors

Family, friends and peers

Can contribute by lending some money or they can invest in your business and become your business partners for the future.


Digging into your own pockets is the immediate first step for most business starters. After that, turning to the personal and professional network around you is usually a natural and fast way of getting one step forward. These people know you well, want to offer support and see you succeed. They don’t necessarily expect any fees or interest for their loans. In addition, having your professional network invest in your company can increase your credibility and pave the way for future funding.


Be aware, money between friends or family can be a really delicate matter and challenge your relationship. Make sure to always have contracts with clear terms in writing to dodge some bullets later on.

Public funding

From one of the many governmental institutions that offer support for new entrepreneurs, such as grants, loans and guarantees.


This can be a safe, secure and reliable way of funding. Getting financed by a public institution can also be a signal of trust and credibility for other financiers. These organizations might also support you in other ways, such as providing guarantees when getting bank financing.


There might be many requirements for you to get this in place and the application process can be lengthy and require a lot of paperwork. Also, in some cases, state funding can only be applied to a company operating in a particular industry. Another thing to be aware of is that loans from state-run organizations can come at a higher interest rate than those offered by a bank. All in all, like always, make sure you understand all terms and costs related to the funding form in question.

Bank financing

From banks such as Nordea, which offers different financing products and solutions for entrepreneurs such as credit cards, overdrafts, loans and leasing.


The autonomy on how to run your business stays with you. The same goes for the ownership of your company, meaning that you (and your possible cofounders) get to keep all the profits. There are many forms of financing for different purposes, and we will help you in finding out the most suitable solution for your situation.


Loans and other credit come with fees and interest rates. More often than not, before lending you money, banks will require that you get a guarantee or collateral in place.


Is when private individuals contribute to your business via online platforms in exchange for a reward or shares of your company. They can also donate or lend you the money, depending on the crowdfunding form.


Crowdfunding campaigns give you easy access to a large pool of potential investors at once. These campaigns can help you to validate your idea in the market, get valuable feedback and establish a customer base early on without even being on the market yet. Crowdfunding can also help you to raise attention to your business promotion-wise.


Crowdfunding has become increasingly popular, so to stand out from all the other campaigns, you need to invest effort in making an interesting campaign for your idea and spend time promoting it. Handling many small shareholders can also be heavy administrative work, and when many people donate big and small, it can be hard to know or predict when or if you’ll ever reach your goal. Campaigns are most often all-or-nothing deals, meaning that if you’re not able to reach your funding goal, you will not get anything. 

Also bear in mind that if you’re not able to deliver on your business idea, people who have believed in you can be disappointed, which can of course affect your reputation.

Professional investors

Such as business angels and venture capital firms can provide you funding in exchange of ownership.


Professional investors are willing to take risk with their investments – of course in hopes of a high return. They will guide you on your journey towards growth as they have extensive experience, network and access to resources that they will let you utilize to get forward. Also remember, that the money is not a loan so you don’t need to pay it back.


Be prepared that professional investors might want more equity and influence than you have been thinking about giving away, and as they are not new in the game they can be tough negotiators. In any case they will take a share of your company and profits, meaning that you lose control and need to start taking in other opinions than your own. They have high expectations on return and will push for that. Note that startups with little experience can have a hard time getting funded here, since professionals are looking for traces and projections of success.

Find a banking partner

When it comes to financing your business, remember that banks are not investors. But if repayment is relatively assured they will – in many cases - lend you the money. To be able to assess whether or not you are able to repay the loan, banks would want to see a solid business plan, collateral and a steady cash flow. They will also consider your commitment: How willing are you to invest your time and money to succeed? 

Your personal credit score can also be an important factor: How is your history with the bank? Have you been able to repay your loans so far?

Let’s get your business started

We meet with many different businesses each day. This means that no matter what challenges and needs your business faces right now, we have probably seen something similar before. Take advantage of our experience, network and expertise when starting or growing your business.

If you are on the lookout for an investor, we can help you to get in touch with potential investors within our network. And we have other connections and partnering opportunities you may benefit from: Take a look at our business initiatives, networks and services. Maybe you’ll find something that can take your business to a new level?