Local Currency Loans
SEK offers local currency loans primarily to international subsidiaries of Swedish export companies and their parent companies in Sweden. Financing is mainly used for working capital and other ongoing financing needs in local markets.
By borrowing in the same currency as the business generates its revenues, companies can reduce foreign exchange risk, create more predictable cash flows and strengthen their financial flexibility.
Working Capital for Local Market Operations
Many Swedish export companies have subsidiaries around the world with ongoing working capital needs to support their day-to-day operations. SEK offers local currency loans that can be used to finance, for example:
- Working capital
- Inventory build-up
- Accounts receivable
- Expansion in local markets
- Captive finance and leasing operations
When financing is aligned with the company’s cash flows, exposure to currency fluctuations is reduced, while the conditions for planning, growth and long-term business development are improved.
Why Companies Choose Local Currency Loans
Reduce Foreign Exchange Risk
When revenues and financing are denominated in the same currency, the impact of exchange rate fluctuations is reduced.
Strengthen Working Capital
Access to local currency financing provides greater flexibility in day-to-day operations and supports the company’s liquidity position.
Create Predictable Cash Flows
Local currency financing makes it easier to plan future payments and financing costs.
Tailored to Local Needs
Financing solutions can be structured based on the company’s market, currency environment and capital requirements.
A Long-Term Financing Partner
SEK combines extensive experience in international financing with strong funding capabilities and deep knowledge of global markets.
Framework Agreements for Recurring Financing Needs
For subsidiaries with recurring financing requirements, SEK can offer framework agreements that simplify ongoing borrowing in local currencies.
These agreements enable borrowers to raise new loans on an ongoing basis with varying amounts and maturities depending on their financing needs at any given time. This allows financing to evolve with the business without requiring each new loan to be structured from scratch.
Key benefits include:
- Efficient management of recurring financing needs
- Reduced administrative burden
- Faster access to financing
- Greater flexibility as the business grows
- Improved conditions for long-term liquidity planning
For companies with ongoing working capital financing requirements, framework agreements provide an efficient and flexible funding structure.
Who Can Benefit from Local Currency Loans?
Swedish Export Companies and Their Subsidiaries
The primary target group for this offering is Swedish export companies, their foreign subsidiaries and finance companies.
Banks
For banks seeking to complement their funding and offer financing in local currencies to their clients.
International Buyers
For companies looking to finance investments or purchases of Swedish goods and services in the currency of the market where they operate.
Would You Like to Discuss Local Currency Financing?
Do you want to know more?
Local Currency Finance, SEK
FAQ
What Currencies Does SEK Offer?
SEK provides financing in a wide range of currencies, depending on market conditions, funding availability and the customer’s financing needs.
Examples of currencies in which SEK has experience providing financing include:
- Australian dollar (AUD)
- Canadian dollar (CAD)
- Chilean peso (CLP)
- Brazilian real (BRL)
- Turkish lira (TRY)
- Mexican peso (MXN)
- Indian rupee (INR)
- South African rand (ZAR)
- Colombian peso (COP)
- Peruvian sol (PEN)
- Chinese yuan renminbi (CNY)
- South Korean won (KRW)
- Thai baht (THB)
- United Arab Emirates dirham (AED)
We are also happy to explore the possibility of providing financing in additional currencies, depending on market conditions and the specific needs of the business.
Who are the most common borrowers?
Most of SEK’s local currency lending is provided to international subsidiaries of Swedish export companies, primarily to finance working capital and day-to-day business needs.
Why do companies choose local currency financing?
When revenues and financing are denominated in the same currency, exposure to exchange rate fluctuations is reduced. This improves cash flow predictability and supports long-term financial planning.
What is a local currency loan?
A local currency loan is a financing solution where the loan is provided in the same currency as the borrower’s revenues and cash flows. This can help reduce foreign exchange risk and create more predictable financing costs.
What can the financing be used for?
Local currency loans are primarily used for working capital financing, but can also support investments, operational funding needs, refinancing, as well as captive finance and leasing activities.
What is a framework agreement?
A framework agreement enables borrowers to draw down new loans on an ongoing basis within an agreed financing structure. Loan amounts and maturities can be adapted to the company’s financing needs over time.
Can SEK provide financing in currencies other than those listed on the website?
Yes. In addition to the currencies listed on our website, SEK is happy to explore opportunities to provide financing in other currencies, depending on market conditions, funding availability and the customer’s needs.