NCR - Digital-First Banking Tracker - October 2023 Banner

Froda and Ageras Collaborate to Provide Financing for SMBs

Stockholm-based FinTech company Froda and Copenhagen-based Ageras are partnering to provide small- to medium-sized businesses (SMBs) across Europe with better access to financing.

Through Froda Emedded, the companies aim to provide faster and more accessible financing, Froda said in a Tuesday (Nov. 7) press release on MyNewsDesk.

The partnership between Froda and Ageras addresses a common challenge faced by SMBs in Europe, which is the difficulty in obtaining financing. With the use of financial, banking and accounting data for rapid credit approvals, this collaboration not only supports Froda’s international expansion but also contributes to the growth of European SMBs and the overall economic development of the region, the release said.

Olle Lundin, CEO and co-founder of Froda, highlighted the company’s vision to help as many small business owners as possible access financing. Through the partnership with Ageras, Froda aims to support even more small businesses in Europe with their financing needs.

In Europe, SMBs make up 99% of all businesses, employ 100 million people, and contribute to over half of Europe’s GDP, per the release. However, access to financing remains a major obstacle for small business owners looking to grow their businesses.

Martin Hegelund, co-founder of Ageras, highlighted the potential of scaling up their business financing offering through the partnership with Froda in the release. He mentioned that their surveys show that 68% of small businesses are seeking financing, but most are unable to obtain it through traditional banks. With Froda’s technology, small businesses can access “smart” funding by utilizing their own financial, banking and accounting data to receive credit approval in as little as 7 seconds, he noted.

Froda Embedded, launched in 2021, has contributing to the company’s growth, per the release. Over the past year, the business area has experienced 100% growth, increased the number of partners from three to nine, and expanded from three to five markets, the company said. Through the partnership with Ageras, Froda’s reach will be further expanded, enabling them to assist more European small businesses with financing.

In the U.S., small business lending has been tightening as well.

PYMNTS research has found that only 39% of Main Street SMBs have access to financing sources such as business credit cards and working capital loans, with 8% of these businesses at risk of closing shop.

A closer look at the data shows that firms in the hospitality industry (11%) and retail trade (10%) sectors have a slightly higher likelihood of closing their doors.

The challenging economic environment has also affected firms’ access to cash, PYMNTS Intelligence research found, with 18% of Main Street SMBs having no access to cash as of July this year, up from 15% in January 2022.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.