Non-resident mortgage: Italian balance sheets read correctly, €960,000 for a mixed-use building
“Your company is successful. Even so, that is not enough for us as it stands.” The entrepreneur from northern Italy had not expected this statement. A non-resident mortgage works differently here: the bank looks at income, equity and where you live — residence decides which banks take the case.
What was the obstacle with the Italian balance sheets, and how was the €960,000 financed?
The obstacle was the Italian balance sheet: the German bank could not classify profit appropriation, shareholder loans, provisions and private withdrawals in foreign accounts. We presented the company in full, with revenue development, own funds, profit stability and assets outside the company. The commitment followed after the economic analysis, with part of the equity left as a reserve.
A successful company — and still doubts
For more than twenty years he had run a mid-sized mechanical-engineering business with around 60 employees. His products were exported to Germany, Austria and Switzerland.
When the opportunity arose to acquire a mixed residential and commercial building in Stuttgart, he seized it.
The property fitted his long-term asset strategy perfectly.
But the very first financing enquiry ended surprisingly.
Not because of the property.
Not because of his creditworthiness.
But because of the balance sheet.
The entrepreneur had a healthy company, a high equity ratio and stable profits.
The property was to be let long-term.
The key figures:
Purchase price: 1,460,000 euros; Equity: 560,000 euros; Financing required: 960,000 euros.
The rental yield was attractive.
The location excellent.
Even so, the bank kept asking for new documents.
Why Italian annual accounts often raise questions
Many German banks know German balance-sheet structures down to the last detail.
International accounts, however, often look different.
Even terms, valuation methods or tax particulars differ considerably.
The consequence:
What is completely self-evident to an Italian tax adviser sometimes seems to require explanation for a German credit officer.
Among other things, the bank asked questions about:
profit appropriation; shareholder loans; provisions; private withdrawals; company structure; shareholdings.
For the entrepreneur the impression arose that his figures were distrusted.
In fact the bank simply wanted to classify them correctly.
The decisive difference
Instead of repeatedly submitting individual documents, the company was first presented in full.
Not only the balance sheet.
But the entire economic development.
How did revenue develop?
How high were the own funds?
How stable were the profits?
Which assets existed outside the company?
Suddenly the overall picture made sense.
The property
The mixed residential and commercial building was in an economically strong region.
All the flats were let.
The commercial units also had long-term tenancy agreements.
So it was not only the entrepreneur who was convincing.
The property itself also represented a solid investment from the bank's point of view.
The financing: After the economic analysis was completed, the commitment followed.
The financing was structured for the long term.
Part of the equity was deliberately left as a reserve in the company.
This protected both the company's liquidity and the private asset structure.
What international entrepreneurs can learn from this
Many entrepreneurs believe that a good balance sheet is automatically enough.
International financings, however, work differently.
The more comprehensibly a company is presented, the more easily banks can assess its economic stability.
It is not only about the figures.
It is about making the story behind the figures comprehensible.
Correctly read Italian balance sheets proved economic capacity: This case shows that international entrepreneurs often do not fail because of their economic capacity.
Much more often, individual banks lack experience with foreign company accounts.
Anyone who documents their economic situation comprehensibly and specifically selects financing partners creates the best conditions for a successful property financing in Germany.
Not every balance sheet is understood straight away.
Good preparation often makes the decisive difference.
Frequently asked questions
Can Italian entrepreneurs finance property in Germany?
Yes. Many banks handle such financings.
Do Italian annual accounts have to be translated?
That depends on the respective lender and the documents submitted.
Are company profits taken into account in full?
The assessment is made individually and depends on the company structure and income situation.
Can larger investment properties be financed too?
Yes. What is decisive is property quality, creditworthiness and economic sustainability.
Is financing possible without a residence in Germany?
Under certain conditions, yes. The requirements, however, differ from bank to bank.
A similar situation? Let’s talk.
Every case with an overseas link is its own. In a free initial call we will tell you honestly what is feasible and which bank fits.
Anonymised individual case, not a guaranteeable statement for other projects · advice free · commission, as a rule, paid by the bank · §34i GewO · not legal or tax advice · no financing commitment; conditions depend on creditworthiness, lending value and bank
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Editorially responsible: Olga Nikushkina — owner, §34i GewO (German mortgage brokerage), adviser register D-W-132-ZUCB-95. Specialised in German property financing with an international dimension: non-residents, foreign-currency income, cross-border workers, expats. Siegfried Perini is entered in the German intermediary register under this licence as a person directly involved in brokerage and advice (§ 11a GewO), active in real estate since 1992. Not legal or tax advice.