Fiduciam has completed the first week of 2019 with its first Spanish loan of the year, a €850k loan secured over a luxury villa in Mallorca.
It was taken for a term of 18 months with an interest rate of 0.80% per month.
The loan and security were entirely structured under Spanish law, with all documentation in Spanish, carried out by Fiduciam’s Spanish team based in London.
Fiduciam is exporting British bridge lending experience to other European countries. While bridging is long-established in the UK, in the rest of Europe it is a relatively undeveloped market.
The institutionally funded lender intends to double its lending volume in Spain to €40 million in 2019. Last year, Fiduciam’s total lending in the country was €21 million, despite it only launching there in January 2018.
Fiduciam currently has nine loan applications in an advanced stage in its Spanish pipeline, with application and legal fees paid, all to close in January and February, for a total amount of €12 million.
As the Spanish legal system is based on civil law, a Spanish mortgage has more similarities with a Dutch or French mortgage than it does with an English mortgage, which can make it more challenging for most UK based lenders.
As has become the case for Fiduciam’s loans in Spain, the borrower is a foreign national who has established a real estate business in Spain. Whilst often Spanish loan applications are brought to London-based Fiduciam through international brokers, in this instance the application came directly from a Mallorca-based intermediary who had heard of Fiduciam.
Cristina Villén (pictured), Fiduciam’s originator of the loan, said: “This was a typical case of a foreign high-net-worth individual who needed to extract some liquidity from an investment property which is being marketed for sale.
“The principal has developed a property trading business in Mallorca and remains an important private equity investor in his country of origin. Spanish banks are reluctant to finance property transactions and trading by foreign nationals.
“At the same time the private banks, which would historically have provided such a loan, have sharply reduced their cross-border loan products.”
Fiduciam launched in Spain at the beginning of 2018. It grants loans in Spain for amounts from €400,000 to €25million with interest rates starting at 0.80% per month.
Its biggest Spanish loan to date is €4.2 million.
Clint White, head of property lending at Fiduciam, said: “During the course of 2018 we have set up our Spanish team in London. Our systems allow multi-currency and multi-jurisdiction loans which makes it possible for us to enter new markets.
“Spain has suffered an amount of deleveraging which is alien to us in the UK, with a lot of people selling properties in a very short space of time. Many Spanish banks have disappeared altogether often making it more difficult for smaller entrepreneurs to get access to finance so Fiduciam is stepping into the gap.
“Demand for both bridging and development loans is soaring, so it is a realistic expectation to double our lending in Spain in 2019.”