SME Finance launches in Finland to help boost funding for SMEs

Fintech firm SME Finance has launched in Finland in order to promote fairer, faster growth financing for the country’s small businesses who face a €2bn budget disparity. 

The move will make it easier for smaller businesses in Finland to obtain growth financing needed to expand, including the unsecured business loans rarely available from conventional banks.

SME Finance also lends to businesses with trading histories than the two-year minimum, normally demanded by mainstream banks.

The fintech’s entry to the local Finnish market comes after rapid growth in Lithuania, from where it has provided more than €1bn in working capital to over 2,000 businesses, primarily in the Baltics. 

The lender focuses on SMEs, as it believes this sector is underserved by mainstream banks. Representing 99% of all businesses in the European Union, employing around 100 million people, and just under 43% of the total in the European private sector, SMEs are believed to be the backbone of modern economies. 

In Finland, just under 230,000 SMEs account for 65% of employment. According to SME Finance, smaller businesses tend to be overlooked in Finland by traditional banks, who regard their needs as uneconomic to service. 

Launching its new digital-first approach to growth financing in Finland, SME Finance will work with the Baltic nation through its digital economy, projected to be cashless by 2029. It is top of the digital leaderboard in the EU’s Digital Economy and Society Index (DESI) for 2020, and seventh in the Global Innovation Index for 2021.

Matias Peltoniemi, SME Finance’s Country Manager for Finland, stated: “Finland’s small businesses are not alone in facing a massive funding gap, put at €2 billion by the ECB. 

“What we have on our side, however, is an openness to the sort of innovation and digital solutions that SME Finance is bringing to the local market. SME Finance offers a fairer, faster way for smaller businesses to access growth financing, even unsecured loans for startups with less than two years’ trading history.”  

SME Finance also has plans for further expansion in 2022 in the Netherlands, Spain, and Germany.