Swedish FinTechs created and Klarna said Wednesday (October 26) that their partnership has helped small and medium-sized enterprises (SMEs) in this country to receive larger loan offers at lower interest rates.
According to a Press release, the collaboration is between Krea, a digital lending platform for SMEs, and Klarna Kosma, Klarna’s fintech platform for banks and retailers. The statement said the partnership has helped businesses receive 15% larger loan offers on average, at a 4% lower interest rate.
“Using Klarna Kosma, SMBs can quickly and securely deliver transaction-level data directly from their business bank account to the Krea platform,” the statement said. “This detailed data on the company’s day-to-day operations gives lenders the confidence to offer larger loans at lower interest rates.”
The companies say this has led Krea to facilitate more small business loan approvals, with more than 20,000 loans offered to SMEs this year.
“Following the Covid pandemic, it has become even more important for lenders to value businesses based on their most recent cash flows,” said Carsten Leth, chief commercial officer of Krea. “Klarna Kosma’s open banking solution allows us to help more small businesses access finance at better rates.”
PYMNES noted earlier this month that many small businesses find themselves in a precarious situation. Although more than half of small and medium-sized enterprises (SMEs) surveyed for our Main Street Health report said they expected to see full-year revenue for 2022, a surprisingly large number – 12% – said that ‘they were less certain of their chances of surviving until 2024.
Read the report: Inflation has mixed effects on high street small businesses
More than two years of COVID-19 chaos, coupled with protracted and runaway inflation, rising interest rates and economic uncertainty, have been strong enough to give many of these so-called SME survivors a second thought.
While this has had a negative effect on the prospects of some SMEs, it has also opened up the possibility for some financial institutions to offer capital and cash flow assistance or payment solutions that can reduce costs and help companies stressed out to save time.
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