In housing companies, it is smart to begin planning for large-scale modernisations well in advance, even two or three years before the work is set to begin. Typical major areas of modernisation include exterior walls, windows and plumbing. The decision on a modernisation project and its financing is made by the general meeting of shareholders.
Good planning and designs make it easier to obtain financing. For this reason, questions related to financing should be included in the plans from the get go. Housing companies should investigate all potentially available public grants for modernisations and save funds in preparation of large-scale projects. One way to achieve this is to collect additional maintenance charges in anticipation of a project.
Sometimes, the housing company may need loans and financial flexibility also for smaller sums. On the other hand, a housing company loan is a simple and reliable way to finance large modernisations in a housing company. OP offers solutions for both financing large-scale basic renovations and managing the day-to-day finances of housing companies.
OP housing company loans and other financing solutions for housing companies
OP offers a variety of solutions to meet the financing needs of housing companies: housing company loan, corporate account with credit facility, or OP Revolving Credit Facility. These financing options differ in terms of their purpose, loan term, interest rate and maximum amount of loan. Together with LeaseGreen, OP also offers an energy modernisation service designed to help reduce the environmental impact and energy costs of housing companies.
No matter the option you choose for your housing company loan, we always offer affordable, safe and flexible financing for your housing company’s needs.
Credit facility solutions for housing companies
Corporate account with credit facility and OP Revolving Credit Facility are limit-type financing solutions, in which financing is easily available whenever the need for additional funding arises.
The maximum amount of financing is agreed when granting the loan, and drawdowns do not require the signing of separate promissory notes once a contract is made on the credit limit. The extent and price of credit facilities are always agreed on a case-by-case basis.
Limit-type financing can be used during a plumbing renovation or basic repairs; for example, when expenses are accrued over a longer period of time. As costs accrue during the project, the credit limit allows for flexible financing. As the project progresses and the total expenses become known, the used limit is converted to an long-term housing company loan which can then be paid off.
The price of a corporate account with credit facility consists of the reference interest rate, markup and a credit facility commission. Account transactions can be monitored and exported to accounting using our versatile bank statement and reference services. In OP Revolving Credit Facility, the price of financing consists of the reference interest rate, markup and loan drawdown fees.
Corporate loan – housing company loan for large and small investments
A corporate loan can be used to finance large-scale purchases and modernisations in a housing company. Corporate loans are especially suitable for long-term investments. Detailed terms of the loan are always agreed individually with each housing company, and the final cost of the housing company loan depends on the loan term and collateral, as well as the housing company’s solvency, among other factors.
To speed up the processing of your housing company loan, include the following appendices in the application:
- official financial statements for the past two years,
- a budget for the current or following year,
- a recent house manager’s certificate, and
- the shareholder register.
We will adjust a suitable loan term and instalments to ensure that the costs of servicing the loan do not place undue burden on the housing company. The price of the loan consists of the interest (reference rate + markup) and management and drawdown fees for the corporate loan.
Protect your housing company against rising interest rates
A housing company loan is a handy way to finance modernisations, but as with all financing, it comes with the risk of rising interest rates. By opting for interest rate protection for the housing company loan, you ensure that rising reference interest rates will not increase the financing charges collected from shareholders.
Thanks to the protection, the housing company can know the amount of future interest expenses in advance, which helps in planning the company’s finances ahead. It also protects future financing charges against rising interest rates while ensuring a flexible repayment scheme, including additional payments by shareholders and repayment holidays.
Energy overhaul – OP finances a greener future
Energy overhaul is a service designed to help reduce the environmental impact and energy costs of housing companies. With the service, housing companies can modernise technical building services from air conditioning to heating and lighting.
The starting point for an energy overhaul is that the savings made from the modernisations by housing companies exceed the costs and can, in an ideal scenario, lead to lower living costs for residents.
Energy overhaul is offered to housing companies as a service package in which expenses can be divided into monthly instalments. LeaseGreen is responsible for the all aspects of energy overhauls and its services, while OP provides financing for the projects.
Energy overhaul may also be financed by a conventional housing company loan.