Finnish SMEs prefer to rely on their own money rather than debt
Finnish small and medium-sized enterprises (SMEs) differ significantly from their European and Swedish counterparts in their approach to financing. According to a recent comparison, Finnish companies avoid taking on debt and primarily seek to fund their operations and growth through equity.
This phenomenon, known as the virtue of thrift, is a traditional part of Finnish corporate culture. While companies in many other countries actively seek external funding or loans for expansion, Finnish entrepreneurs prefer to keep their company's finances as independent of creditors as possible.
Research shows that this cautious approach affects how Finnish companies invest in the future. Although relying on one's own money increases a company's stability and security, it can sometimes slow down rapid growth or the capture of new markets compared to competitors that use more debt capital.
For the Finnish economy, this situation is interesting. While moderate debt is safe for companies, experts are considering whether a bolder use of financing could help Finnish companies compete even more strongly in international markets. At the moment, however, the Finnish business landscape continues to value stability and self-sufficiency above all else.