Once upon a time, a relatively young and hopeful entrepreneur started a small business. Everything was fresh, exciting and a bit unfamiliar. The first thing that needed to be done was to obtain a bank certificate stating that the founder’s hard-earned and saved start-up equity capital had been deposited. With pride, the entrepreneur went to the nearest bank to announce that he wanted to open an account for his new business and deposit one hundred thousand kroner into his account.
He enthusiastically described his plans to the inscrutable bank clerk, who asked, “but why have you chosen to come to our bank?” The entrepreneur was taken aback, since this bank had received the prestigious “Best Swedish Commercial Bank” award, but he calmly replied because it seemed like a good business bank. After 15 minutes, the entrepreneur was informed that the bank did not believe in his idea and that the bank therefore rejected his customer application.
The entrepreneur felt like he had been doused with a bucket of freezing water. He thought, “how is this possible?” He didn’t want to borrow money, he just wanted to open an account and make a deposit. He started to doubt himself; what if the the banker was right - that he wasn’t cut out for starting a business in the real world? Fortunately, he didn’t give up, and soon found another bank that was more understanding.
That young entrepreneur was me. Since then, I’ve often been told that my experience was not unique - that the big bank frequently rejects normal account applications, and makes customers feel insignificant. That makes me upset - especially in light of the fact that 4 out of 5 jobs are created by small business owners and that a nation’s future prosperity largely rests on its capacity to found and nurture new growing companies.
Today, 15 years later, I am what is often called a serial entrepreneur. I love creating new businesses and disrupting traditional, archaic industries. First, Televerket’s monopoly was challenged, and then Svenska Spel. Next on the chopping block is banking oligopoly.
Through the years I have fortunately been able to establish contacts with cordial and competent commercial bankers, but for new entrepreneurs the challenge remains - or has even gotten stiffer. And that is just to open an account; it is even more daunting to try to obtain capital to grow and develop your business. By and large, obtaining a commercial loan via a larger bank is a lost cause if you do not have a very long track record and a sizeable turnover, or a childhood friend with the bank director. In any case, binders full of documentation are required - business plans, budgets, period accounts and, not least, that you are a full customer with the bank regarding payments, debit card and pension savings, with a considerable sum of assets.
We know that small companies are often forced to turn to family and friends for funding or risk missing out on investments and growth. While the traditional big banks are extremely profitable and interest rates are at historical bottom levels, lending to small businesses has decreased to historic lows over the past decade. Eureka!! I just stumbled upon a burgeoning new business idea, I thought.
Qred wants to help companies grow. We believe that all companies, from blossoming startups to mature businesses, should get the treatment and respect they deserve. It should as simple to get a business loan to finance an investment, as it is to buy a book online. Moreover, with a well-designed and functioning digital solution, you should expect an answer within minutes, not weeks. And, by saving on town square branch offices, we can also reduce costs.
To summarise, our ambition is to help as many small business owners as we can, and to get the traditional big banks to become just a little more polite and accommodating to their current and potential customers.
Emil Sunvisson, CEO and founder
Qred
