A new business often needs to borrow capital. This requirement can be met in several ways.
A new business normally needs to borrow capital to start up operations and purchase assets. Banks are able to provide capital through different types of financing. Several banks offer startup loans or getting started loans.
Financing operations and production plant
All businesses need a bank to handle their financial transactions and thereby finance daily operations. This can be done via an ordinary bank account or a bank overdraft facility.
In general, banks, mortgage lenders and leasing companies co-finance plant and other major investments by providing loans.
If wanting a credit agreement with the bank, you should expect to provide personal security (for example security in the equity of your house) in addition to business assets.
Stricter requirements for financial security
One of the consequences of the financial crisis has been stricter security requirements from the banks. In other words, if you need to borrow money from the bank to start or run a business, you will need to provide security in the form of equity in a house etc.
Another possibility is to get a Get started loan (Kom-i-gang lån) or a loan with a Loan guarantee via the state investment fund Vækstfonden. Both provide a guarantee (security) for your loan arrangement which your bank applies for on your behalf when granting you a loan to start a business.
The Get started loan is a combined loan guarantee and counselling arrangement for you who are about to start your own business or already own a company with a CVR number that is less than three years old.
The purpose of the Kom-i-gang lån is to enable even more entrepreneurs to get financing via a financial institution. Therefore, entrepreneurs can take out a loan of maximum DKK 1 million. The state (via Vækstfonden) provides a guarantee (security) to the bank for 75 % of the underlying loan commitment.
At the same time, you will be offered counselling on starting a company. You pay a premium of 3 percent of the principal of the loan, but not any running premium for the guarantee.
Vækstfonden coorperates with a number of financial institutions that offers Kom-i-gang-lån. The financial institution solely assesses your business plan and grants the loans.
Please note that not all banks are part of the Get started loan scheme - contact your bank to find out if they are.
If your business is based on a unique idea or product, it is possible to obtain co-financing in the form of a loan or capital injection from one of the innovation environments in Denmark.
Venture companies will also help to finance business startups, but the prospect of considerable earnings is a prerequisite. Most venture companies invest in selected industries, product areas or geographical areas.
Danish Venture and Private Equity Association lists venture capital companies.
The website also lists venture capital funds and business angels, but they seldom invest in startup businesses.
Additional information about banks
The Danish Bankers Association has drawn up a list of the biggest banks in Denmark (the website is in Danish, but you can scroll down and see the list of banks).