Bridging Finance option Spain
Bridging finance, equity release and re-finance in Spain has historically been very difficult to achieve and for non residents impossible.
Providers where they did exist tended to be private investors offering very poor terms at very high risk to the borrower.
From January this year a Pension fund owned company are offering such facilities in Spain.
The Company been operating in England and Wales, and Holland for some time and have just expanded their operations to Spain.
General terms and conditions
Loans are offered up to € 5m with a focus on loans between € 250k to € 1m.
Terms can be granted for 6 months to 3 years to a maximum in Spain of 50% loan to value.
The short term loans are for non resident owners who own their property via a company or partnership structure in Spain and lending for those nationalities that may find borrowing from main stream lenders difficult.
Given Spanish Banks are also not offering any equity release services to those with properties in Spain who wish to use the cash for purposes outside Spain the product can provide short term opportunity to release funds for investment in business etc elsewhere in the world. Spanish Banks will only offer Mortgages in Spain for the purpose of purchase
The lender will lend against Residential, Semi Commercial or Commercial property. This includes semi finished developments where it is at roof stage and all licences are in place and compliant. Specialised properties like Hotels can be considered on a case by case basis.
Interest is serviced monthly in arrears or retained from advance and agreed on a case by case basis.
Borrowing can be granted in Euros or Sterling
The prime security must be unecumbered but additional security can be taken with a second charge.
Interest rates and fees
Interest rates vary depending on type of property and what the funds are for but start from 0.69% per month and rise to 0.90% per month.
Set up fees in Spain include a 2% arrangement fee from the lender along with all the normal costs associated with borrowing in Spain like, Notary and land registry fees, mortgage deed tax and valuation fees.
In addition to the arrangement fee there is also an administration fee of € 1.500 which may be higher where an overseas offshore structure requiring further due diligence is involved in the ownership.
All loans are non regulated so borrowers should take legal advice before entering into any commitment.