The strongest argument for a loan is timing: if a roof is already leaking, you cannot spend years accumulating the renovation fund while the damage grows. A loan lets the work start immediately while repayment is spread over several years.
The general meeting must decide on borrowing, typically with a qualified majority under the bylaws. The bank examines the condominium's solvency, the discipline of common cost payments and the ratio of arrears during credit assessment.
The question of security must also be clarified: as collateral banks often require a guarantee over common property or the contributions linked to repayment. The general meeting resolution and the loan contract must record this clearly.
It is worth comparing the interest burden of the loan with what an energy grant or green loan scheme would save: often a combination of the two is most worthwhile, as it reduces the principal to be repaid.
When scheduling repayment, bear in mind that the share of flats in arrears may change over time, so a prudent financial plan always includes some reserve for this.
Merbo's finance team helps compile the documentation required for borrowing and examines how worthwhile it is to combine the loan with an available grant.