LOAN FOR BUSINESS IN AUSTRIA
As Austria ranks among the top countries in the Euro Area that have developed financial systems as well as soundness in banks, there has been a massive emergence of banks and entities that provide business loans and other financial products at very friendly rates. The average lending rate in Austria was below 4% in 2021.
Where to get business loans
- Banks: There are more than 650 banks in Austria that provide different products in their own unique standards. To qualify for a business loan, your business will require a high level of solvency as most banks opt to finance consolidated companies.
- Companies and private capital lenders: Getting funds from entities under this category just got easier and more convenient as the loan processing happens online. Meaning, they ensure fast concessions. Additionally, their financial products and offers are often lower in cost than those of banks.
- Alternative financing platforms for crowdlending: these are online platforms where companies connect us with private investors. Once we request a business loan, it’s upon these investors to decide on whether to contribute capital to your business or not. We’ll be required to repay the investors in the form of interest. The whole process is done through the internet and it might take two days to receive feedback.
Forms of financing for companies
With business lines of credit, the borrower can tap the money whenever needed until they reach their borrowing limit. The borrower will only repay the amount they have withdrawn and the interest attached and not the whole amount of loan that’s granted. Many Austrian lenders offer this product.
This is a type of financing for SMEs where the lender pays for our invoices to one or more suppliers. We’re then left to clear the bill with the supplier either in full (the interest included), in part, or in installments.
- P2B or crowdlending loans
Through an online platform, a private lender may decide to invest in our business or for a reason, refuse to invest. You’ll see different services as you compare one platform with another in terms of the loan amount and terms and conditions.
- Loans with mortgage guarantee
With these types of loans, we’re only funded if we are able to present property (mortgage) to be used as a guarantee. The concession of these loans takes longer because of the appraisal processes involved.
Business loan conditions
Different entities will have different requirements for business loans. Below are some of the common requirements:
- National registration: some entities will need to draw confidence from the registration of your business, including whether you meet all the legal requirements (according to the Austrian law) for running a business in Austria, either as an expat or a native.
- Annual income: Austrian law requires businesses to keep account records, annual financial statements, and annual reports. Your lender might need this information to tell the solvency of your business and eventually decide on whether to fund you with the amount you’re signing up for.
- The seniority of the company: many lenders will not easily finance a business that’s been running for less than 12 months. Nonetheless, you might find alternative financing options if you’re just starting up a business or it’s a few months old.
- Credit history: before a lender approves a loan application, they will check with the different credit bureaus in Austria (KSV or SCHUFA) to establish whether your name or business has a poor credit history.
Documents needed to get funding
- VAT return from the previous year and the current year.
- Income tax return.
- Bank statement (if in another bank).
- Updated balance sheet of the company’s turnover.
- Proof of payment of Corporate Tax.
Our company provides an assistance in obtaining a loan for:
- purchase of real estate (house, apartment, other buildings) on the secondary market;
- purchase of land for construction;
- purchase of business equipment;
- other investment projects.
To get financing or a loan in, it is very important to have a reliable partner who can choose funds, prepare applications for financing, substantiate estimates, help work out effective business models, etc.
Our services are priced from 200 euros per consultation and subsequent support.