Bridge financing until receipt of energy subsidy

Hello everyone,

as described in another thread, the renovation of our terraced house is finally progressing, but it is also becoming more expensive than expected. The price increases are within the scope of the subsidies (KfW, BAFA, and City of Munich) that we can expect for the energy-efficient refurbishment.

The construction financing was tailored to the originally estimated price. Since the subsidies are only paid some time after completion, but the final invoices are due upon completion, it may be that we need to bridge a sum of several thousand euros. Although we could manage this (by selling shares), I am hesitant to do so to cover a gap that exists for only a few weeks.

Does anyone know if there are loans specifically intended for such situations? The requirements are:

1) A very short-term financing of a maximum of 50 to 60 k€
2) Can be repaid in a lump sum after a maximum of a few months.
3) Should not be a classic construction loan, as registration in the land register would be too cumbersome.
4) Complicating matters is that one of us is on parental leave until September (strictly speaking, therefore, has no regular income). Thus, a significant portion of the current household income flows into the actual construction loan. We are managing well with our reserves and, as mentioned, there are securities available. Nevertheless, this was the decisive point why our house bank could not help further.

Thanks in advance for any advice!

Nonetheless, this was the decisive point why our house bank could not help any further.

If I have understood this correctly, this bridging loan would be secured twice: on the one hand by your securities account and on the other hand by the claim to the payment of the subsidy funds. If that were my house bank, they would have some real explaining to do. The point is: the administrative effort is not significantly less than with a large, long-term loan. You probably still don’t want to pay out the large amount? We also need a bridging loan and made it a condition right at the conclusion last year. Terms: any collateral (no land charge) and 2%.

You probably still don't want to pay the big money?

Thank you for the answer.

Well, what do you mean by big money? Some time ago, I vaguely addressed the issue with an advisor at the financing bank (this is not our main bank!). As a response, I was offered a loan with 4% interest. We would gladly pay that. Unfortunately, I can no longer reach that advisor, and the advisor responsible for us has nothing to do with granting the loan.

Before I follow up with this bank again, I wanted to check around here to see if there are any other good tips.

hm, even 4% on 60,000 euros would only be 200 euros per month in interest for the bank. Don’t get me wrong, that’s good money, but it probably doesn’t pay off for a bank over just a few months. In my opinion, you are letting the house bank off way too easily. They’ve got the attractive contract locked in now and you have to wander around because of a small interim financing. Thanks for that.

Instalment loan with free special repayments. Some providers also have promotional loans

Installment loan with free special repayment. Some providers also have promotional loans

Who is supposed to grant that? Only one income, home financing is running. 84 months term = 800€ installment.