Private Equity

A funding source that is booming today is coming from private capital. We understand how private equity financing to money provided by natural or legal persons, not under the supervision of the Bank of Spain. For several years, banks have reduced resources for financing business and private sector. Because of this crisis, the credit sector has emerged parallel to conventional banking, which is providing resources to a depressed economy, characterized by a strong recruitment in finance. Against this background, emerging business opportunities that take advantage of those who have the scarce resource: money. In this sense, private capital has entered strongly in the domestic economy of Spain, with the differentiating aspects of the bank loan, the following: Interest rate around 50% annually. Being an activity that focuses on the lack of action and with a certain degree of risk, capital is paid with high interest rates.

Ensuring that support this type of interest is represented by real estate. It follows that the investor puts their money into those buildings to ensure sufficient investment: first residences in densely populated areas and major provinces. Not just any warranty or anywhere. The return on investment is short term, hence the term loans have a 3.6, 9 and 12 months. Loan approval is based on the guarantee provided, as required for processing a few documents. Considering the above, there is no doubt that private equity is an expensive source of funding and is aimed at those people whose current economic situation can not find a solution to their liquidity needs in traditional banking, most recently option that qualify. If you for some reason you need to go to this source of funding, keep in mind that as of April 1 is in effect the Law 2 / 2009 31 March, which regulates this activity.

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