Arranging Bridging Finance in Austria

You might also consider bridging finance in Austria if it's not beneficial to use a mortgage to buy a property in Austria - perhaps because you will sell the property relatively soon after you have bought it or because accessing a mortgage in a short time frame is challenging. Here, a bridge loan gives you the time to arrange a competitive conventional finance package like a mortgage without stress or hurry. You will usually use a bridge loan to complete the property purchase and refinance to a longer-term lending product. 

You can also use an Austria bridging loan to release equity from a property you already own in Austria. Here, you will usually benefit from your creditor's flexible approach to lending. You can use the loan to cover an unexpected invoice, consolidate debt, invest in stocks or a high-ROI project or create the liquidity you need to cover a short-term gap in your income or finances. Again, the speed with which you can draw down a bridge loan will support this because you can access liquidity quickly, which means you can solve problems or pursue projects just as fast. 

An Austria bridge loan will see your lender use your property as security for the loan - they will place a charge on it to do this. Lenders offer around 60-65% LTV for this type of finance. Still, the amount you can borrow will ultimately depend on your financial background and liquidity, your reason for borrowing, the value of your property and how much you want to borrow against it, and your exit. Several lenders offer international bridge loans, and there is a choice of lenders specialising in both high-value lending and smaller deals. Large Austria bridge loans can amount to a few million euros, and smaller loans are usually in the region of a few hundred thousand euros. Loans generally start at around €50,000.

If you want an Austrian bridge loan, you'll need to have a specific purpose for using this type of finance. For example, you'll use it to buy a property quickly or without a mortgage, to cover a gap in your income, or to create liquidity to pursue a project. You can use the equity released from an Austrian property for almost any purpose. To do this, you'll need to be able to document exactly what you will use the loan for and how you will manage the funds. 

Knowing how you will pay back the loan is essential - this is called your exit. It won't be enough to explain to lenders how you will exit - you'll need to document how you will do so and the steps you will take to deliver your exit. Timing is important as lenders will need to know you can repay the loan by a specific date, so a solid strategy that lays out the actions you will take or the steps you will carry out to exit is also key. 

You can exit an Austria bridging loan by refinancing (usually to a mortgage), selling your property, or using liquidity you've accrued or received from other sources. Examples of liquidity events include using the proceeds of a divorce settlement, inheritance, sale of assets or a business to repay the loan. If you take this route, lenders will want to understand more about the liquidity event and when it will happen. Again, explaining how you will raise the capital won't be enough here. You'll need to prove how you will come into the capital you need to repay the loan, the source of those funds, when you will receive the money, how much you will receive, and so on. 

You can also use your corporate entities in Austrian bridging loans. There are plenty of lenders that can lend directly to corporate structures or lend in deals that include structures. This type of lending is more niche, and the lenders that offer these loans tend to be specialists in high-value deals that usually involve high-net-worth individuals or families. The lenders that provide Austria bridge loans in deals that include structures can also work directly with your advisory team or professional service providers to set up and optimise these loans. 

Austrian bridging loans are also a way to release equity from property you own in Austria. Here, your lender will use your real estate as security for the loan, and you can release equity from the property to create liquidity. You can use this liquidity for various objectives - you can use the loan to consolidate debt, buy a house (in Austria or abroad), invest, buy assets, or cover a short-term gap in your income. Lenders are typically flexible regarding how you can use the loan, as long as you have a good case for borrowing, supported by a solid exit strategy.  

One of the advantages of Austria bridging loans is that lenders offer multi-currency finance. This means that even though the security (property) is based in Austria, which uses the euro as its currency, you don't necessarily have to borrow in euros. This is because, in equity release deals, you might want to use your Austrian property as security for the loan but use the finance to fund a project elsewhere - maybe in the US, UK or Switzerland, for example. If you wanted to use the loan in the UK, it might well be more practical and convenient to borrow in pounds sterling. Recognising that the loan capital is used abroad in many cases, lenders can facilitate lending in a different currency to support using the funds internationally.