“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.
Information
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.
A successful company — and still doubts
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.
Frequently asked questions
Can Italian entrepreneurs finance property in Germany?
Do Italian annual accounts have to be translated?
Are company profits taken into account in full?
Can larger investment properties be financed too?
Is financing possible without a residence in Germany?
Conclusion
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.
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