Swedish FinTechs Krea and Klarna say that their partnership has helped small and medium-sized enterprises (SMEs) in that country receive larger loan offers at lower interest rates.
According to a news release, the collaboration is between Krea, a digital SME loan platform, and Klarna Kosma, Klarna’s Fintech platform for banks and retailers. The release says the partnership has helped businesses receive on average 15% larger loan offers, at a 4% lower interest rate.
“Using Klarna Kosma SMEs can quickly and securely provide transaction-level data directly from their business bank account to the Krea platform,” the release said. “This detailed data on the day-to-day operations of the business provides lenders with the confidence to offer larger loans at lower interest rates.”
The companies say this has led to Krea facilitating more small business loan approvals, with upwards of 20,000 loans being offered to SMEs this year.
“Following the Covid pandemic, it has become even more important for lenders to assess companies based on their most recent cash flows,” said Carsten Leth, chief commercial officer at Krea. “Klarna Kosma’s open banking solution enables us to help more small businesses get access to finance at better rates.”
PYMNTS noted earlier this month that many small businesses find themselves in a precarious position. Although more than half of the small and medium-sized businesses (SMBs) surveyed for our Main Street Health report said they expected to see full-year revenues up for 2022, a strikingly large number — 12% — said they were less certain about their chances of surviving into 2024.
Two-plus years of COVID-19 chaos, coupled with extended, rampant inflation, rising interest rates and economic uncertainty, have been strong enough to give many of these so-called SMB survivors second thoughts.
While this has had an adverse effect on the outlook for some SMBs, it has also opened up an opportunity for some financial institutions to offer capital and cash flow assistance or payment solutions that can reduce costs and help stressed-out businesses buy time.