Where would I find a loan for a business in Tenerife?

[Mikee]

Hi Guys,

New to the forum so apologies if this has been asked a million times already but I was wondering about aquiring a loan out there to buy a business.

I was originally looking at something small i.e. less than 100k. However, an opportunity has came about which is quite a bit more (knocking on for 300k).

This is only due to size and location really. The net profits are all relative too so I know it would be worth it.

I was going to finance the smaller one by paying for half & getting a business loan from over here for the rest. Easily affordable as I'll be keeping my job over here.

The issue with the larger one is really just whether or not I can get the finance. I'm thinking deposit size, etc.

I've seen the accounts and put it this way;

If cost vs profit the place was over here. Even in these times, the bank wouldn't even want a deposit. They'd just take a look and say there's no point as the profits will pay it back in 5 years.

My question is then, is it the same over in Tenerife or do you need a much bigger deposit?

Any help would be much appreciated.

Kind regards,
Mikee

[golf birdie]

getting money from the banks is nigh on impossible at the moment. Someone I know wanted a 160,000 mortgage and was refused, despite offering security of property worth over 1 million. I have heard many other such stories as well. Good luck but be prepared.

[Tom & Sharon]

Hi Guys,

New to the forum so apologies if this has been asked a million times already but I was wondering about aquiring a loan out there to buy a business.

I was originally looking at something small i.e. less than 100k. However, an opportunity has came about which is quite a bit more (knocking on for 300k).

This is only due to size and location really. The net profits are all relative too so I know it would be worth it.

I was going to finance the smaller one by paying for half & getting a business loan from over here for the rest. Easily affordable as I'll be keeping my job over here.

The issue with the larger one is really just whether or not I can get the finance. I'm thinking deposit size, etc.

I've seen the accounts and put it this way;

If cost vs profit the place was over here. Even in these times, the bank wouldn't even want a deposit. They'd just take a look and say there's no point as the profits will pay it back in 5 years.

My question is then, is it the same over in Tenerife or do you need a much bigger deposit?

Any help would be much appreciated.

Kind regards,
Mikee


Assuming the accounts are genuine, which they're probably not!

[Mikee]

Assuming the accounts are genuine, which they're probably not!

I do appreciate the warning but I've seen the day to day costs & income, etc. I'm very comfortable with the accuracy! :)

[Tom & Sharon]

I do appreciate the warning but I've seen the day to day costs & income, etc. I'm very comfortable with the accuracy! :)

Are you an accountant?

Not trying to sound too negative after your 1st post as a newbie, just please beware.

This has been done to death on here really, but I'm presuming it's a bar/restaurant as you mention size & location.

If you can pay it back in 5 years as you say from profit, this is a 300k bar making 60k a year net profit?

Why are they selling? Please don't tell me it's for "health/family reasons" like all the other ones in Tenerife that are for sale as well.

Why would you want to invest 300k in a business in Tenerife, and still keep your job in the UK? :confused::confused:

That could be a recipe for the quickest way known to man, to lose everything you've ever worked for!

[TOTO 99]

There's only one way to look at this I'm afraid.
If this place was worth 300k, then someone with 300k would have bought it by now.
Sorry if that's not what you want to hear. I love hearing of people willing to take a chance but you might need to lower your sights a little and work your way up. Good luck either way.

[Mikee]

To answer the accountant question; Sort of. I'm a tax advisor to the public sector. I can work remotely.
It was only meant as a general question as to whether I took finance from here or over there. Here it is I guess! :-)

[tonypub]

To answer the accountant question; Sort of. I'm a tax advisor to the public sector. I can work remotely.
It was only meant as a general question as to whether I took finance from here or over there. Here it is I guess! :-)form a mini-state(your own country)join the E U, then you will be able to command any sum of cash you want and will only have to pay half back.,better than wining the lotto

[bonitatime]

You are unlikely to get a loan in Spain right now unless you have a lot of money in the bank. I was at a government workshop last week run by an ex-bank manager and they stated that even for Spanish nationals mortgages are very hard to get

[Mikee]

Not the most constructive tonypub, but beautifully done.
Made me laugh anyway!

[atlantico]

even 2-3 years ago it was very difficult let alone now. We went to Caja Canarias for a fourth mortgage with them, having 50% equity in all properties (100% in one) and 50% cash deposit on just a €150k mortgage, . . . . . . I've never heard a bank manager laugh so loud !! He still laughs when we pass him in the street !

[timmylish]

If you put up 90% in CASH the bank may look at your proposals.

[CIM]

I have had plenty of mortgages through this year. They take an age but I get them through. Just done a self build mortgage for 500,000€ with one bank and we are closing another for 475,000€ with another bank after waiting a couple of months for paperwork from the town hall. 2 others recently for under 100,000€ and 2 more for between 100k and 150k.
The problem for most people is they simply have no idea which banks want the business and what type of clients they are happy to take on so they end up wasting lots of time with the wrong lenders. The branch staff aren't much help either as two staff in two branches of the same company will tell you entirely different things!
If you aren´t able to speak to those who work within the higher echelons of Spanish banks and dont know their current attitudes then you are going to struggle - simple as! And even when you do speak to these people, it can still be very time consuming/frustrating.
Spanish mortgages/Tenerife mortgages in a nutshell:

Banks are not interested in commercial lending
70% is still the max for non-residents
Full documentation is required
Anyone with bad credit is refused
2nd and 3rd mortgages are not favoured
Employed clients are favoured over self employed
Joint applications are favoured over single applications (even if only one person has an income.)
Banks are raising their margins (so mortgages are becoming more expensive)
Compulsory products are becoming more and more difficult to avoid
People still try to go direct to avoid paying a fee to someone who could save them a lot of time and trouble...!

[bonitatime]

I actually laughed to myself when she said this as I knew from your comments that you have been doing well this year but I would hazard a thought you pre-qualify and know how to work the system.