Business loan – What is it for and how to get one?

A business loan is one of the most common ways to finance company operations and growth. In this guide we explain what business loans are used for, their main types, and how to get the best terms.

What is a business loan?

A business loan is a loan granted to a company that can be used freely for business expenses – investments, working capital, equipment, or even acquisitions. The borrower is the company (via its Business ID), and the loan doesn’t personally tie you the same way a consumer loan does. Most often, the company’s responsible persons sign the agreement.

What is a business loan used for?

Typical uses:

• Working capital – balancing cash flow over seasonal variations or long payment terms.
• Equipment and machinery – new tools without tying up own capital.
• Inventory – seasonal stock and larger orders.
• Marketing and growth projects – online campaigns, new sales channels, internationalisation.
• Premises renovation – improving workspaces without lengthy bank negotiations.
• Acquisitions – buying out a competitor or financing succession.

Types of business loans

Unsecured business loan

An unsecured business loan doesn’t require pledged property. Best for smaller to medium-sized loan amounts (typically €5,000 – €350,000). Rates are slightly higher than secured loans, but decisions are fast and the process simpler.

Secured business loan

For larger loan amounts (up to €3M), the lender usually requires collateral – property, business mortgage or personal guarantee. Rate is lower but processing takes longer and requires more documentation.

Business flex credit

Works like a business credit card: a credit limit is granted that can be drawn and repaid at your own pace. Interest is only paid on used credit.

Requirements – who can get a business loan?

Lenders’ common requirements:

• Company has operated in Finland for at least 6 months (some lenders 1 year).
• Annual revenue at least €40,000 – €200,000 depending on lender.
• Decision-makers and owners reside permanently in Finland.
• Finnish Business ID and bank account.
• No significant payment defaults on the company.
• Personal credit records in order (checked from responsible persons).

Applying for a business loan – 4 steps

1. Determine financing need

Think carefully about what the loan will be used for and how much you need. Make a budget or cash flow analysis to help define the limits.

2. Compare lenders

Pricing varies significantly between lenders. Compare actual total costs – not just the rate. Use e.g. Lainafy comparison.

3. Fill in application online

Application is typically under 10 minutes. Identification with online banking credentials. Some lenders just require the company’s Business ID.

4. Get decision and funds

Decision typically comes the same day, and money is transferred to the account within 1–2 banking days.

Tips for a cheaper business loan

• Compare effective annual rates or total costs – not just nominal rate.
• Keep company’s credit records clean. Pay invoices on time.
• Show strong income and cash flow – helps in negotiation.
• Think realistic repayment period. Too long grows total interest costs.
• Compare multiple lenders – the difference can be thousands of euros.

Frequently asked questions

Can a newly founded company get a business loan?

Most lenders require 6–12 months of operation. Very early-stage startups are usually directed to Business Finland or banks’ startup financing.

Do personal credit records affect a business loan?

Yes. Most lenders check both company and responsible persons’ personal credit records.

Is the business loan interest tax-deductible?

Business loan interest costs are usually deductible in company taxation. Check details with your accountant.

Can a business loan be repaid early?

Yes, all lenders operating in Finland allow early repayment without additional fees.

See also: Business financing options – business loan vs. factoring and leasing.