Financing a Business in Costa Rica With Property-Backed Loans

Financing a business in Costa Rica often comes down to two questions: what property secures the request, and how will the principal be repaid? A good business idea can explain the purpose of the funds, but it does not replace suitable real-estate security, clear title, realistic value, and a practical repayment plan.

GAP coordinates qualified property-backed financing requests with private lenders and may lend directly in selected cases. GAP reviews requests starting at US$50,000, uses first-lien property security only, and does not require or pull a credit score for a normal property-backed request.

• Requests starting at US$50,000
• Terms generally ranging from 6 months to 3 years
• First-lien property security only
• No credit score required or pulled for a normal property-backed request
• Qualified borrowers of any nationality may be reviewed
• Qualified loans can often close in about 2 weeks after a complete file and due diligence

Every request is reviewed individually. Providing information does not create an approval, funding commitment, rate, loan amount, term, or closing date.

Business Financing Is Not the Same as an Unsecured Business Loan

Private property-backed financing is short-term financing secured by suitable Costa Rica real estate. It is not an unsecured business loan, a credit line, a credit card, or a long-term bank mortgage.

A lender may consider a business-related purpose when the property, requested amount, title position, and repayment plan make sense. The review still starts with the security.

Possible uses of funds may include:

• Completing property improvements before sale, refinance, or rental use
• Buying or expanding an established business
• Paying out existing debt that affects title or timing
• Completing construction or a documented infrastructure need
• Covering a defined short-term business expense
• Creating time for an expected sale, refinance, or another documented transaction

A vague request for “working capital” may need more explanation. A lender may ask for budgets, invoices, contracts, payoff details, purchase information, or other documents that explain why the funds are needed.

Start With the Property

For a property-backed request, the real estate needs to be easy to identify and understand. The lender will look at location, road access, condition, marketability, ownership, realistic value, and whether the required first-lien position can be obtained.

Completed homes and commercial properties in accessible, marketable locations can often be easier to review than raw land, unfinished construction, remote property, or specialized buildings. That does not mean another property type is automatically rejected. It may require a lower amount, stronger supporting information, or a different structure.

Useful starting information includes:

• A Google Maps, Waze, or WhatsApp location pin
• Current photographs of the road, access, driveway, exterior, buildings, land, and surrounding area
• A Folio Real and Plano Catastro, if available
• Details of lot size, construction, utilities, current use, and condition
• Value support, including an appraisal, purchase information, or credible comparable properties
• A clear explanation of unfinished work, access concerns, permits, or unusual property features

Keep the Requested Amount Realistic

Loan-to-value, or LTV, compares the requested loan amount with the property’s realistic current value. For example, a US$200,000 request against a property realistically valued at US$500,000 equals 40% LTV.

US$200,000 ÷ US$500,000 = 40% LTV

For stronger completed properties in marketable locations, requests around 30% to 40% LTV can often be easier to structure. In a stronger file, an amount approaching 50% LTV may sometimes be considered, depending on the property, title position, repayment plan, lender requirements, and legal structure.

No LTV amount is guaranteed. A listing price, previous purchase price, construction cost, insured value, or hoped-for future sale price is not automatically the value a lender will use.

Raw land, unfinished construction, remote property, specialized buildings, or properties with unresolved access, water, drainage, utility, or permit questions may support a lower amount or may not be workable.

Read what loan-to-value means in Costa Rica.

Title, Existing Debt, and First-Lien Security

GAP uses first-lien property security only. Before a request can move toward closing, the lender needs to understand ownership, existing mortgages, private loans, liens, annotations, unpaid taxes, payoff requirements, and other registered concerns.

An existing mortgage does not automatically prevent financing. However, the balance, payoff instructions, and legal closing structure need to be clear early. Existing registered debt may need to be paid through the proper closing process before a new lender can register in the required first position.

If a corporation owns the property or operates the business, the lender and closing attorney or Notary Public will need to review corporate records and signing authority. The closing attorney or Notary Public prepares the legal documents and handles registration.

Disclose known title, debt, corporate, access, or permit concerns early. They may be manageable, but surprises found late in due diligence can delay or stop a request.

The Property Is Security, Not the Repayment Plan

A valuable property does not, by itself, make a business financing request workable. The lender needs both suitable security and a realistic plan to repay the principal balance at maturity.

• Security: What property secures the loan, what is its realistic value, and can the lender obtain the required first-lien position?
• Repayment: How will agreed payments be made during the term, and how will the principal balance be repaid at maturity?

A future property sale, refinance, business transaction, asset sale, investor payment, or another documented source may be part of the repayment plan. It needs to be realistic and supported where possible.

A loan renewal is not automatic. Another lender is not required to replace the loan when it matures.

Read why your repayment plan matters for a private loan.

Prepare the Business Explanation and Supporting Documents

The business explanation should be direct. State the exact requested amount, what the money will be used for, what documents support that use, and how the loan fits the repayment plan.

Depending on the request, helpful supporting information may include:

• A business budget, purchase agreement, contractor estimate, invoice, or payoff statement
• Documents explaining a sale, refinance, or other expected repayment source
• Corporate records and signing authority where relevant
• Current business financial information when it supports the payment plan
• Details of existing business debt or obligations
• Clear information about permits, municipal requirements, or operating conditions where relevant

The lender does not need a glossy presentation. Clear, consistent facts are more useful than broad promises about future income.

Does GAP Require or Pull a Credit Score?

No. GAP does not require or pull a credit score for a normal property-backed loan request.

This can matter to foreign owners who do not have Costa Rica credit history or who may not fit a bank’s standard residency, income, employment, or document requirements.

It does not remove the need for careful review. The property security, title position, realistic value, requested amount, payment plan, and principal-repayment plan still need to work.

Private Financing Compared With Bank Financing

Private property-backed financing and bank financing are different products with different review standards.

Banks may offer longer terms and may have their own requirements involving income, residency, employment, credit history, appraisals, banking, insurance, and supporting documents. Their approval and closing timelines may also be longer.

Private lenders focus closely on the property, first-lien security, realistic value, requested amount, repayment plan, and legal closing structure. Terms are generally shorter, usually ranging from 6 months to 3 years.

How Long Can a Qualified Loan Take?

After GAP has a complete file and due diligence is finished, qualified loans can often close in about 2 weeks.

Timing depends on lender review, title, legal work, banking, documents, existing debt, payoff requirements, and closing requirements. No closing date is guaranteed.

Frequently Asked Questions

Can I finance a business in Costa Rica with a property-backed loan?

Possibly. A request may be reviewed when suitable Costa Rica real estate supports the requested amount and there is a clear, realistic plan for payments and principal repayment at maturity.

Does GAP offer unsecured business loans?

No. GAP focuses on property-backed financing secured by Costa Rica real estate. GAP uses first-lien property security only.

What does a lender review for business financing?

A lender may review the property location, access, marketability, realistic value, requested amount, title position, existing debt, use of funds, payment plan, principal-repayment plan, and legal file.

Does GAP require or pull a credit score?

No. GAP does not require or pull a credit score for a normal property-backed loan request. Each request is reviewed individually.

How long are the loan terms?

Terms generally range from 6 months to 3 years. Final payment structure, maturity, interest, costs, and interest-guarantee guidelines depend on the lender and signed loan documents.

How quickly can a qualified request close?

After GAP has a complete file and due diligence is finished, qualified loans can often close in about 2 weeks. Timing depends on the full file and closing requirements. No closing date is guaranteed.

Start your loan request here. You can also contact GAP through WhatsApp at +506 4001 6413.

This article is for general information only. It is not a loan offer, legal advice, financial advice, tax advice, real estate advice, or a promise of financing. Loan availability, loan amounts, rates, terms, costs, and closing timing depend on the individual property, borrower file, lender requirements, due diligence, and signed documents.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)