Starting a Business Loan in Costa Rica – What Expats Need to Know

Starting or expanding a business can require capital before the business has reached its next stage. A property owner may need funds for inventory, equipment, improvements, working capital, a purchase opportunity, or a short-term business obligation.

For borrowers who own suitable real estate, a property-backed loan may be one possible route. GAP coordinates qualified borrower requests with private lenders for short-term financing secured by Costa Rica real estate.

The lender is not simply reviewing the business idea. The property, title position, realistic value, requested amount, use of funds, payment plan, and principal-repayment plan all need to work together.

GAP reviews property-backed requests starting at US$50,000. GAP does not require or pull a credit score for a normal property-backed request and uses first-lien property security only.

• Requests starting at US$50,000
• Terms generally ranging from 6 months to 3 years
• First-lien property security only
• GAP does not require or pull a credit score for a normal 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.

Can You Use Property to Help Finance a Business?

Possibly. Real estate can provide security for a short-term business-financing request when it has suitable value, clear ownership, and a workable title position.

The loan may be secured by a home, commercial property, rental property, development property, or another marketable property. The lender needs to understand the property’s current condition, location, access, demand, realistic value, existing debt, and ability to support the requested amount.

Using property as security does not mean the lender is funding the business idea alone. The property and the complete repayment plan remain central to the review.

What Private Lenders Review

Private lenders normally review the full file before deciding whether a request may be workable. Important points can include:

• Property location, access, driveway, condition, drainage, utilities, usable area, and marketability
• Ownership, title position, corporate authority where relevant, and registered issues
• Existing mortgages, private loans, liens, annotations, taxes, or other legal concerns
• Realistic current value supported by comparable sales, purchase information, or an appraisal when needed
• The requested loan amount and exact use of funds
• The business purpose and whether the amount requested is reasonable for that purpose
• How agreed payments will be made during the loan term
• How the principal balance will be repaid at maturity

A lender may also need to understand the business structure, shareholders, signing authority, current operations, revenue information, contracts, and any permits that materially affect the request.

Completed, marketable homes and commercial properties can often be easier to review than vacant land, unfinished construction, remote property, or specialized buildings.

GAP Does Not Require or Pull a Credit Score

GAP does not require or pull a credit score for a normal property-backed loan request.

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

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

How Much Can You Borrow Against Property?

Private lenders compare the requested amount with the property’s realistic current value. This is called loan-to-value, or LTV.

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. A stronger file may sometimes support an amount approaching 50% LTV, depending on the property, title position, repayment plan, lender requirements, and legal structure.

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

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

Why First-Lien Security Matters

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

An existing mortgage does not automatically prevent financing. However, the current 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 so a new lender can register in the required first position.

If a corporation owns the property, the lender and closing attorney or notary will need to review corporate records and signing authority.

The Property Is Security, Not the Repayment Plan

A property can be valuable and still not support a workable request if there is no realistic way 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?

Business income, a future sale, refinance, asset sale, investor capital, contract proceeds, or another transaction 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.

Private Financing Compared With Bank Financing

Private property-backed lending 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, business records, 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 required legal structure. Terms are generally shorter, usually ranging from 6 months to 3 years.

Private financing is not a guaranteed replacement for bank financing. It is short-term financing that needs to be structured carefully.

What Helps Start a Business-Financing Review?

• A Google Maps, Waze, or WhatsApp location pin
• Current photographs of the property, road access, driveway, buildings, and surrounding area
• A Folio Real and Plano Catastro, if available
• The requested amount and exact business use of funds
• Realistic value support, appraisal information, purchase information, or comparable properties
• Details of any existing mortgage, lien, annotation, tax balance, or legal concern
• Corporate records and signing authority if a corporation owns the property
• Business information that supports the proposed payment and principal-repayment plan
• A clear plan for payments during the term and repayment of principal at maturity

Lawsen Tellier, Director of Operations, can help explain what is most important first and what can be gathered as the review develops.

Business Structure and Legal Documentation

The financing review is separate from setting up or operating a business. Company registration, tax obligations, municipal permits, sector-specific licences, employment matters, and accounting requirements should be addressed with the appropriate Costa Rica professionals.

If the borrower or property owner is a corporation, the lender and closing attorney or notary may need to review the company’s legal records, ownership information, and authority to sign the loan and security documents.

The closing attorney or notary handles the required legal documents, mortgage registration, and any payoff or registration steps needed for closing.

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 get a business loan in Costa Rica as a foreigner?

Qualified foreign borrowers may be reviewed for property-backed financing. Nationality, residency status, and lack of Costa Rica credit history do not automatically prevent review. The property, title, realistic value, requested amount, repayment plan, and complete file still need to work.

Can I use my Costa Rica property as security for business financing?

Possibly. The property needs suitable realistic value, clear ownership, a workable title position, and the ability to provide required first-lien security. The proposed business use of funds and repayment plan are also reviewed.

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 based on the property, title, requested amount, repayment plan, and complete file.

What security does GAP require?

GAP uses first-lien property security only. Ownership, title, existing debt, liens, annotations, taxes, payoff requirements, and the legal closing structure all need to be reviewed.

How long are business-financing terms?

Terms generally range from 6 months to 3 years. Final payment structure, maturity, interest, costs, and early-repayment provisions 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)