How your savings can support Swedish businesses

The global economic environment continues to be characterised by uncertainty. US policies continue to influence global markets, Russia’s invasion of Ukraine remains ongoing, and developments in China are being closely monitored by investors around the world. At the same time, there are signs of stabilisation in the Swedish economy, with a more favourable interest rate environment and a stronger Swedish krona. In times like these, it is worth considering how to allocate your savings. One way is to invest in Swedish businesses. This can be done in several ways, through equities, funds, or by investing in credit.

When people talk about credit investments, many naturally think of traditional loans to individuals or businesses. Investments in real estate projects are one example of business financing that we have discussed in previous newsletters. However, there are also other types of credit that play an important role for Swedish companies while offering investors additional diversification opportunities, both in relation to other asset classes and to other types of credit. One such credit type is factoring.

In its simplest form, factoring means that a company sells its customer invoices to a finance company instead of waiting for the customer to pay. The company receives most of the funds immediately and can use the capital for day to day operations, investments, or continued growth. For business owners, this is an effective way to improve liquidity. Funds that would otherwise be tied up in outstanding invoices are released and can be used where they create the greatest value.

For investors in credit, factoring offers several attractive characteristics. It is a credit type that differs from traditional business loans and real estate financing, which contributes to greater diversification within a credit portfolio. At the same time, the invested capital directly supports Swedish businesses by providing them with better conditions to operate and grow.

In short, factoring is a type of credit that helps companies get paid faster while giving investors exposure to a segment of the credit market that often receives less attention than traditional lending. It is also a tangible way for savings to contribute to Swedish growth and business development.

Factoring credits are currently included in both Fixed and our Yield and Balanced savings strategies. Our products are built on a combination of different credit types, with factoring representing one of several components that contribute to the overall portfolio composition. Through our products, investors gain exposure to this segment of the credit market alongside other types of credit investments.

If you would like to learn more about our products or how we work with different credit types, you are always welcome to contact us.