Abstract
Research has shown that young businesses with growth ambitions are important for job creation and innovation. A major obstacle to economic growth is the lack of financing for young firms. The Ratio Institute and the Swedish Federation of Business Owners have conducted a study to outline the financial sources of young and small businesses in Sweden and to investigate the challenges for financing the firms. We use a sample of 380 limited liability firms in Sweden that are members of the Swedish Federation of Business Owners. The majority of the firms were founded 2010-2013. For our sample, the results show that the majority of the firms (87%) use personal savings to finance their firms, while 28% use bank loans which is the second most common type of finance.