Business Loan

[LosInnocentes]

We have tried the Banks in local Town : Caja Rural, Bankia and Sol Bank, all with no luck - any suggestions would be appreciated !

[FuenteAlamo]

Do you have regular work Los Innocentes? I can't think of any bank who will offer a loan or equity release mortgage without at leat 2 years proof of uninterupted earnings and a sqeaky clean Experian report. If you are self employed they often need up to 5 years accounts!

It's really tough. Even people with good earnings and long service and low outgoings aren't a dead cert anymore.

[LosInnocentes]

The problem is that I have a modest lump sum to invest in a business, but all the business that I think are viable are out of my price range. At the moment I have no work, and any work that I have had here in Spain has either been short term, casual or Black. I am legally resident here and a UK citizen, but am struggling to get offers of as little as 20k, even though my projections are that I cab very easily make the loan repayments and have the equity in my house.

[FuenteAlamo]

The problem is that I have a modest lump sum to invest in a business, but all the business that I think are viable are out of my price range. At the moment I have no work, and any work that I have had here in Spain has either been short term, casual or Black. I am legally resident here and a UK citizen, .

That could be another problem. You need to have a history of being fiscally active to be seen as a fiscal resident.

Paying your health and taxes for a couple of years will get you some credability, but if you only worked for cash and made no tax returns then you aren't seen as part of the system.

I see cases where British people selling their house don't expect to pay 3% CGT at the notary because they have residency, yet still are required to do so because they have never submitted tax returns or health payments during the previous years.

Things are getting really tight now, and if you are offered a loan or re-mortgage, take a close look at the terms and conditions, the banks are getting almost criminal with their costs and threats.

[MrGrumpy]

A Good analysis by Fuente, but on top of this any Bank that you manage to even get as far as talking to will expect to see a water-tight business plan with projected incomings & outgoings. Furthermore, they are highly unlikely to make an offer on the understanding that you will be using the revenue from this venture alone to repay the loan.

[MitchTheBuilder]

Your success and how receptive a Bank is to you is going to depend on your exact financial and personal circumstance. I went through a similar process 6 months ago, trudging around all of the Banks and found that BBVA were the best option for me. They may (or may not be) be for you aswell, but it could be worth putting them towards the top of your list if it saves you some time.

[Robster]

Whatever you do I would try and get things moving quickly, as I'm sure loans are going to get harder to come by over the next few months !

[CostaGratis]

Let's hope your nickname is not accurate. Spain is a very tough place place for business and you need to have serious margins to cope with all the red tape, government interference, backhanders etc. etc.

Do you know examples of similar businesses and how they are doing? If not, there is probably a good reason for it.

As for the Banks, very few of them are actually Business oriented... the fact that you have even approached some of these traditional saving or mortgages type banks tells me you need to be doing some more research...

Sorry to be a damp squib, but forewarned is forearmed...