Articles

Europe is experiencing a lending crunch and SMEs are in the middle of it. Despite being the backbone of the European economy, many SMEs struggle to access financing. This gap isn’t just a matter of perception, it’s a structural challenge in banking that embedded financing can help address.

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Banks play a vital role in supporting SMEs and driving economic growth. However, conventional lending processes have often been complex and time-consuming, making it difficult to efficiently cater to SMEs’ unique financing needs. The rise of embedded financing is providing new opportunities for banks to streamline lending, strengthen SME relationships and improve retention, all while maintaining profitability.
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1. Addressing the market gap with faster, more efficient lending

SME loan processes have traditionally been resource-intensive, requiring significant time and effort for both banks and applicants. Many SMEs are run by small teams or solopreneurs who need quick, seamless solutions. By integrating embedded financing solutions, banks can digitalize and automate loan assessments, reducing approval times from weeks to seconds. This enhances the customer experience and allows banks to serve a broader range of businesses more efficiently.

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2. Adding revenue streams and expanding capabilities without heavy investment

Banks have deep financial expertise, particularly in business lending. However, adapting legacy systems to meet SMEs' evolving needs can be costly and time-consuming. Embedded financing enables banks to integrate proven, pre-built lending solutions that align with their existing infrastructure, eliminating the need for extensive in-house development. By leveraging white-labeled platforms, banks can expand their SME offerings and increase revenue while focusing on their core strengths.

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3. Advancing financial inclusion and supporting economic resilience

Providing SMEs with easier access to working capital has significant societal benefits. Small businesses are critical job creators and drivers of local economies across Europe and embedded financing empowers banks to support financial inclusion by offering faster, more accessible lending solutions to a wider range of businesses. This contributes to stronger, more resilient communities and aligns with broader ESG objectives, particularly in promoting sustainable economic growth, reducing inequalities and fostering innovation at the grassroots level.

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Embedded financing: A strategic opportunity for banks

The financial landscape is evolving rapidly and SME expectations are shifting. Banks have the opportunity to improve their competitive edge, innovate and build stronger SME relationships if they were to embrace embedded financing. Implementing embedded financing solutions enables banks to:

• Expand SME lending capabilities without overhauling existing systems
• Improve operational efficiency and reduce administrative burdens
• Comply with emerging regulatory requirements while enhancing customer service
• Strengthen their brand positioning as a trusted partner for SMEs

Embedded financing is one of the most exciting technological innovations that has been brought forward in a very long time. It has the possibility to rewrite the financial market as we know it and allow banks to better support businesses, drive economic progress and strengthen their role as key players in the financial ecosystem.

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At Froda Embedded, we specialize in providing embedded SME lending solutions that allows banks to serve small businesses seamlessly. By integrating Froda Embedded’s solutions, banks can bridge the SME financing gap while driving sustainable growth.

As a small business owner, there’s a lot to manage beyond the actual work itself. For many, finances, bookkeeping, and accounting can be sources of stress and uncertainty. Very few people start a business out of a passion for financial administration—but the truth is that solid bookkeeping and accounting are essential for providing your business with a stable financial foundation. To help you stay on top of your company’s finances and avoid potential pitfalls, we’ve compiled five useful accounting tips tailored to small business owners.
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What’s the difference between accounting and bookkeeping?

The terms accounting and bookkeeping are often used interchangeably, but they’re not quite the same. Bookkeeping refers to the systematic recording of all business transactions. Accounting is a broader concept that includes bookkeeping, but also encompasses financial statements, tax filings, and reporting. Depending on your business structure, different rules and regulations will apply—but the following tips are useful regardless of how your company is set up.

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Separate personal and business finances

The first step is to separate your personal finances from your business finances—especially important if you're running a sole proprietorship. Keeping business and personal expenses separate makes it much easier to manage your finances and avoid confusion during bookkeeping. Open a dedicated business bank account and use it exclusively for all business transactions.

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Use smart accounting software

There are plenty of affordable and user-friendly accounting tools available today that can make life as a business owner much easier. Many of them offer automation features that take care of day-to-day bookkeeping once your business bank account is connected. Investing in a reliable accounting software that automates administrative tasks is a smart move for any small business. It also helps you keep track of invoices, receipts, and other important documents—reducing the risk of human error and providing a clearer view of your company’s financial status. Plus, it simplifies things when it's time to close the books at the end of the year.

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Hire an accountant or bookkeeping consultant

For some businesses, handling bookkeeping in-house just isn’t efficient or feasible. In such cases, hiring an expert may be a more cost-effective solution. While it does add an expense, working with an accountant or bookkeeping consultant can be well worth it. They’re experts in their field and can ensure that your books are compliant with current laws and regulations, while also offering valuable advice on how to best manage your finances. In the long run, this can save you both time and money.

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Create and follow a budget

Setting up a budget is one of the simplest and most effective ways to take control of your business finances. Estimate your expenses and income, and review your budget regularly. This gives you a better financial overview, allows you to plan for investments, and ensures that your business is on the right track. A clear and consistently followed budget also makes it easier to adjust when needed or deal with unexpected costs—especially if you’ve built in a financial buffer to handle them.

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Stay on top of taxes

Being aware of which taxes and fees apply to your business is an easy way to avoid turning a potential problem into a real one—and it makes tax season much smoother. Make sure to pay your taxes and fees on time and use calendar reminders for key dates. It’s also wise to set aside extra money each month to avoid cash flow issues in case your tax bill ends up being higher than expected.

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By following these accounting tips, you can lay a solid financial foundation for your business and reduce the stress that often comes with managing finances. A well-managed economy gives you the freedom to focus on growing and developing your business instead of getting bogged down in administration.

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Artificial intelligence has been a hot topic in recent years, quickly becoming a crucial technology for businesses of all sizes. Advances in generative AI, along with the increasing availability of AI models through APIs, have led to new types of services with expanded use cases. This shift has made AI more accessible—not just for large tech companies, but for the general public as well. But what impact can these developments have on small business owners, and in what areas can AI be applied? Here are a few key areas where AI can make a significant difference, helping small businesses improve efficiency, customer experience, and growth.

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Administration

Running a business often involves a great deal of administrative work. One of the most obvious ways AI can support small businesses is by automating these administrative tasks. AI tools can take over repetitive and time-consuming processes, reducing human error and freeing up valuable time. In accounting and finance, AI can be particularly helpful in automating bookkeeping, invoicing, and tax preparation—lightening the workload and allowing business owners to focus on other aspects of their company.

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Marketing

Marketing comes in many forms, from large-scale campaigns to small, everyday efforts. Regardless of size, every business relies on marketing to reach customers and grow. However, creating high-quality content—whether text-based or visual—can be time-consuming, expensive, or both, especially for small business owners who lack specialized skills in this area. Generative AI tools, such as ChatGPT and Midjourney, have made headlines for their ability to rapidly generate text and visuals. These tools have the potential to revolutionize marketing for small businesses, enabling them to produce blog posts, social media content, email campaigns, and other marketing materials with minimal manual effort.

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Customer service

One of AI’s biggest advantages is its ability to handle time-consuming tasks efficiently. This makes it particularly valuable in customer service. By integrating an AI-powered chatbot, businesses can provide instant, 24/7 responses to customer inquiries, significantly reducing the volume of questions that need to be answered via email or phone. This not only saves time for business owners but also improves the customer experience by offering faster support.

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Skills development

AI can play a crucial role in education and professional development, both for business owners themselves and their employees. Today, AI-powered training solutions can analyze learning needs and create personalized education programs. AI-driven platforms, including virtual assistants and chatbots, offer instant feedback and support, ensuring continuous skills development. Additionally, AI can help identify skill gaps and recommend areas for improvement, enabling businesses to upskill their teams more effectively.

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Forecasting and analytics

Small businesses often lack the resources to process complex data for forecasting and analysis. However, AI can bridge this gap. By analyzing data, AI can identify trends and patterns that help business owners make more informed decisions. It can also be used to predict future trends, customer behaviors, and market shifts—enhancing strategic planning. Additionally, AI can provide real-time business analytics, highlighting both strengths and areas that need improvement.

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AI has the potential to unlock opportunities for small businesses that were once only available to large corporations with substantial budgets. By leveraging AI to automate time-consuming administrative tasks and handle complex processes, small business owners can save time while enhancing their operations. However, the best use of AI will vary from business to business, so it’s important to start by identifying your company’s specific needs before selecting the right AI tools for you.

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Getting a small business financing operation up and running isn’t something you do overnight. You need to have infrastructure, license and funding amongst a number of things in place to be able to do it. But thanks to embedded finance, non-financial companies such as platforms, marketplaces, SaaS providers, or other B2B services can leverage the capabilities of financial companies and integrate financing solutions and offer it directly to their customers. Offering financing to your customers brings a number of benefits to your business, here are five reasons why you should add it to your offering. 

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Your customers need it

It’s no secret that access to financing is a major hurdle for the majority of small businesses, and has been for quite some time. Europe alone has a 400 billion EUR financing gap, and worldwide the number is in trillions. So, your small business customers probably have a hard time getting access to financing when they need it, and you can solve it for them. But it’s not only that you’ll give your customers that are actively seeking financing a solution to their problem, you’ll also open up possibilities for those who aren’t in the market at the moment. Knowing that they have access to financing if and when they need it, your customers can make bets and investments they previously held back because they didn’t think they could finance them. It will also allow them to become more flexible with their cashflow management

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An additional revenue stream

The most obvious reason to integrate financing is the fact that it allows you to add an additional revenue stream, which requires minimal effort or investment from your end. With Embedded, you can integrate our white-label SME lending solutions into your existing platform with only a couple of hours worth of development time. Once integrated, the only thing you need to do to earn money from it, is to funnel your customers to use the service. You don’t need to worry about the operational aspects, funding or credit risk as the platform handles all of it. Essentially, embedded SME financing lets you add a service to your offering that manages itself and generates income with no risk attached to it.

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It increases loyalty

It’s not only revenue that you get from embedding financing though. Another reason why you should add financing is because your customers will start to see you as an enabler of their success, as you’d solve a problem that many of them have. That might lead to even bigger gains than the revenue you’re earning from their lending. When your customers become more satisfied, they will also become more loyal to you, meaning your NPS score will increase. You’ll essentially start a circle of growth, where your customers will do more business with you, while also turning into promoters for your brand.

Makes customers stay customers for longer

It’s not only the customers that become promoters that will stay for longer though. Your average customer will too. Partially because you’ll get a lock-in effect on customers that have an active loan, as it will become harder for them to switch during the repayment period. But more importantly, because offering financing makes your overall offering more attractive. You’ll gain an edge on your competitors by offering a service that brings value to your customers. And the knowledge that financing is far from widely available for small businesses elsewhere will also have an effect. It will make your customer more hesitant to move on from your business, as doing so means that they’ll also move on from the possibility of accessing financing when they need it, and will lower your churn rate as a result. 

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Potential to grow your core business

Interest revenue, increased loyalty and reduced churn can all be attributed to the lending itself – but looking past, adding financing to your offering will have more long term effects. Financing will enable your customers to invest and grow their businesses, and when they do, they will grow their overall business with you too. So on top of the short term effects of embedded lending, you’ll also get long-term core-business growth from providing your customers with the tools to help them succeed. 

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Small businesses need financing, and by integrating lending into your offering, you can bring it to them, and gain positive effects to your business in the process. By using Embedded, you can add a lending solution that is developed specifically to the needs of SMEs and that’s easily integrated into your existing platform, under your brand. With an application process that is completed in minutes, automatic data collection, credit analysis and decisioning, as well as instant loan disbursements, you can give your customers an unmatched financing experience, while proving value for both you and your customers.

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Book a demo today to learn more about how embedded lending can help you grow your business. 

Hiring your first employee as a small business owner is an exciting milestone, but it also brings challenges. Whether you have hired before or if you are going to do it for the first time, it can feel like a big step to take and that it must not go wrong. It's an investment to hire and find the right skills and employees is not straightforward. A hiring process can also be costly if it takes time or if it doesn't get right and the process needs to be redone. Here are some tips and advice to make the process as smooth and successful as possible for you when you are going to hire.

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Before you start
In order to be employed, your company needs to be registered as an employer with the Swedish Tax Agency. If not already, you can register as an employer at verksamt.se. On verksamt.se you will also find practical information about being an employer.

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Define the needs
Before starting the recruitment process, it is important to think carefully about the specific needs of your company. Write down a detailed job description that clarifies the duties, responsibilities and goals of the new role. Also consider what skills, experience and qualifications are required. If you already have employees, it's a good idea to talk to them about what needs and areas they think should be reinforced. Next, formulate a job description, define job duties and what requirements are imposed on the person to be hired.

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Budgeting for expenses
Hiring involves more costs than just the salary. You need to take into account employer contributions, insurance and work tools. It's also important to think about any benefits that might make your offer more attractive, like the wellness allowance and pension. Not all hires provide the right of return from day one. But by making a concrete budget, you can ensure that your company can actually afford to hire and that you can bear the cost until the investment starts to pay off.

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Start searching
Once you've made your preparations, it's time to start searching for the right candidate. Put together a job advertisement that is relevant to the profile and qualifications you are looking for and publish in relevant channels. It is important that the description in the advertisement actually matches the intended role. It is rarely good if the person you hire does not feel that the role matched their expectations, and then there is a risk that you will not get the maximum return, and may need to redo the process. Be open to hiring someone with potential and willingness to learn instead of staring you blind to it being exactly the right experience. Sometimes attitude, person chemistry and cultural match can be a better choice than the right experience on paper.

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Conduct interviews & check references
Schedule interviews and prepare questions that can help you gain a deeper understanding of the candidate's competencies and personality. Structure the interview to cover the most important aspects, like work experience, skills and problem solving skills. Also, be sure to assess how well the candidate fits into your company culture. Let the interview become a two-way communication where the candidate will also have the opportunity to ask questions and get a feel for the company. Before you decide to hire, it is good to check the candidate's credentials. This can reveal both positive and negative aspects that do not appear in the interview but can help you make a more informed choice.

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Offer competitive terms
Finding good employees can be difficult, keeping them happy doesn't have to be. It can be easy to try to get away as cheaply as possible when hiring, but retaining labor is all of the time cheaper than finding new ones. And if your employee does not feel sufficiently appreciated or that they are not receiving compensation in line with their contributions, it can easily lead to decreased motivation and them starting to look for other jobs. Therefore, start by offering the most competitive terms possible based on your circumstances and the employee's profile to ensure their satisfaction. Keep in mind that it is not only the salary that comes into play, but other benefits such as flexibility, development and a stimulating work environment are just as important.

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Create a good introduction
A well-thought-out introduction is crucial for a new employee to feel welcome and quickly get up to speed with their tasks. Prepare an onboarding process and have a clear plan for what the employee will be working on and how they will be integrated into their responsibilities. Be ready to provide support for a period until they have a solid grasp of the job. Also, ensure they receive all the necessary information and tools to perform their tasks efficiently. Additionally, schedule regular check-ins during the first few months to ensure they feel confident and have everything they need.

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Follow-up regularly
Schedule regular follow-up meetings with your new employee to discuss their progress and provide feedback. This allows you to identify any potential issues early on and ensure they receive the necessary support to succeed. These meetings are also a great opportunity to talk about their development and future goals, which can boost their engagement and motivation. Additionally, it’s important for you to remain flexible and be prepared to make adjustments if needed.

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Hiring is a big step for many small business owners and something that can be critical to the success of the business. By carefully-planning and executing the recruitment process, you can make it easier to find the right employees to contribute to the growth and development of the company.

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When 2024 is summed up, we can state that it has been a challenging but also insightful year for Sweden's small business owners. With high interest rates, rising costs and changing customer behaviour, adaptation has been required to keep up with developments. At the same time, there have been glimmers of light in the form of new opportunities thanks to digitalisation and an increased awareness of the importance of local presence. Here's a look back at the most significant trends in 2024 and some thoughts on what might be good to carry into 2025.

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Trends that shaped 2024

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Continued economic challenges
High interest rates and the general economic situation put pressure on entrepreneurs from several directions and made 2024 a tough year for many. Especially in sectors such as construction and trade, many entrepreneurs struggled with falling demand. At the same time, it is possible to look forward with more optimism than in years. Inflation has stabilised and interest rates have started to fall. This will benefit businesses both in terms of reduced financing costs, but also increased demand as the economy begins to recover.

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New technologies provide new opportunities
AI went from being a trend to actually becoming a tool that makes it easier for entrepreneurs. Today, there are a range of AI tools that can help entrepreneurs automate tasks, streamline processes and even create materials. For entrepreneurs, not only does this mean new opportunities, but AI can help free up both time and energy in a busy everyday life.

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Sustainability continues to be important
In 2024, customers continued to prioritize companies that take responsibility for sustainability — both socially and environmentally. For small business owners, this meant that a clear sustainability strategy was not only a way to do good, but also a business necessity. Working with sustainability is also a way to secure the company for the future, as it is likely that higher demands will be placed on smaller companies in the future related to sustainability work.

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Events around the world benefited the local
An outside world of trade threats, unrest and increased customer awareness led to the return of the local becoming a trend in the past year. Customers came to appreciate personal meetings and businesses with local roots. Something that made social media, storytelling and presence in the local community important tools for building trust and loyalty.

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Things to think about in 2025
Even if 2025 looks to be a much better year for Sweden's entrepreneurs, lessons can be learned from the past year, in order to build for the future.

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Build buffers and be flexible: With times now hopefully getting better, it's good to start building up the company's buffer. That way, you can be better equipped in case there are tougher times again.

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Bend using new technology if you don't already: As I said, AI and other digital solutions can help you streamline your business, and if you haven't tested the tools available today, it's time to do so. It can give your business new opportunities and free up time for you that you can spend on developing the business.

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Be proactive: With customers now starting to come back, it's good to be ahead of time with your planning to be able to gain market share during the year. Therefore, do your research
and start processing the customers instead of waiting and hoping they come to you.
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Think about cyber security: The threat from hacker attacks and fraud is growing, with businesses and individuals alike increasingly affected. Is corporate cyber security not fully in place? 2025 is the year to act! Take control and learn more at sakerhetskollen.se.

2024 has shown that small business owners are resourceful and conflicted when times get tougher. By being close to customers, exploiting technological opportunities and investing in sustainability, you can create the conditions for success in 2025.