P2P Lending in Spain

May 22nd, 2020
5 minutes read

The Spanish Market for Crowdlending

According to data from the latest report by Cambridge Centre for Alternative Finance on the global market of alternative finance and crowdfunding, Spain had a total funding volume of €374.1 million in 2018, up from €160.5 million in 2017, which corresponds to a growth rate of 133.1%. This makes Spain the sixth-largest crowdfunding market in Europe and the 17th largest crowdfunding market in the world. The countries ahead of Spain in Europe are the UK, the Netherlands, Germany, France, and Italy.

Spain’s crowdfunding volume primarily came from three debt-based crowdfunding business models: P2P consumer lending (€110.8 m), invoice trading (€96.3 m), and P2P business lending (€83.5 m). Together with P2P property lending (€19.8 m), the debt-based business models accounted for 83.0% of the total funding volume in Spain.

Best Peer-to-Peer Lending Platforms in Spain

Here, you will find a list of the best peer-to-peer lending platforms in Spain. When choosing the best peer-to-peer lending sites in a country we consider a variety of factors that you can find in the Methodology below.

More P2P Lending Platforms in Spain

Below, you will find a list of the remaining peer-to-peer lending platforms located in Spain. If a new platform has been launched since this article was published and you do not see it here, please feel free to submit the platform by using the submit formula.

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Taxation on Peer-to-Peer Lending in Spain

Interest earned from peer-to-peer lending in Spain is taxed as income from movable capital as stated in the Spanish personal income tax law. If the investor is a natural person resident in Spain that happens according to the following progressive tax rates:

  • Up to €6.000: 19%
  • From €6.000 to €50.000: 21%
  • Over €50.000: 23%

Most Spanish peer-to-peer platforms will automatically withhold 19% as this is the lowest tax rate. However, this is not true for all Spanish platforms, so make sure to check how tax is handled on the platform(s) where you invest. In general, international platforms will not be withholding tax on your behalf but again – exceptions do exist.

If the project owner is not a Spanish resident, other rules may apply.

Keep in mind that this should not be considered tax advice and can be outdated, why you should always contact a tax adviser when handling your taxes.

Spanish Regulation on Lending-based Crowdfunding and P2P Lending

Since there is still a lack of common rules for crowdfunding in the European Union, regulation of peer-to-peer in Spain is based on national legislation though this might change in the foreseeable future as the European Commission in March 2018 presented a proposal for a regulative framework on crowd and P2P finance as part of their Fintech Action Plan.

Below, you will find an overview of some of the most important aspects of the regulatory framework for lending-based crowdfunding in Italy. These highlights can also be found in the impact assessment accompanying the proposal for a regulation on crowdfunding in the EU.

  • Bespoke Regime: Yes
  • Scope of lenders and borrowers: Consumer-to-Business; Business-to-Business; consumer-to-consumer. Loans can be solicited for a business, education, or consumer project.
  • Entry into force: 29 April 2015
  • Authorisation: Authorisation and registration with CNMV after mandatory and binding opinion from Bank of Spain.
  • Money handling: Platforms might only receive funds on behalf of investors or borrowers if they do have the purpose of payment and the platform has been granted an authorization as a hybrid payment institution. They should segregate their own funds and their clients’ funds into separate accounts.
  • Minimum capital requirements: €60,000 (share capital), a professional liability insurance, or a combination of both. If funds that are raised exceed €2 million, equity will amount to €120,000 (and increased in proportion to the funds raised, up to €2 million).
  • Type of loans: Fixed or variable rate loan; profit-participating loans; senior and subordinated loans; unsecured and secured loans (but projects shall not be secured by a mortgage on the borrower´s main residence. Furthermore, promotors that qualify as consumers according to the general consumer protection laws may not apply for a mortgage-backed loan).
  • Business continuity requirements: Platforms must have effective mechanisms in place that ensure that, in the event of cessation of activity, essential services are provided to those projects that had successfully obtained funding.
  • KYC rules (suitability or appropriateness; AML checks): Platforms must assess the experience and knowledge of their clients and verify that they can make their own investment decisions and understand and prioritize information risks.
  • Size of loans: €2 million per project, per platform, in a given year. €5 million, if the offer is limited to accredited investors.
  • Maximum investable amounts: 
    • Non -accredited investors: €3,000 per project and €10,000 max a year.
    • Accredited investors: no limit. Accredited investors are (i) Institutional investors; (ii) Companies with €1 million of assets, €2 million of annual turnover or €300,000 of equity; (iii) Individuals with €50,000 of annual income or €100,000 of financial assets.
  • Disclosure to investors by borrower: Description of the project seeking funding and borrowers’ main features.
  • Information requirements & risk warnings by platforms: Information on the platform itself, (especially on how the projects are selected) and on the loan. General warnings on risks to non-accredited investors.
  • Due Diligence: Platform shall verify that the information about the project required under the law to be disclosed to investors is complete.
  • Conflict of interest: Platform to publish a policy on conflict of interests; Platform’s directors, managers, employees to avoid conflict of interests; Shareholders of platforms cannot provide advice on projects. Platform, directors, managers, and significant shareholders can invest in a project (max. 10%) and can act as an issuer (max. 10% of funds raised through the platform)
  • Professional requirements: Recognised knowledge, experience, and professional repute of directors and managers.
Methodology

At P2PMarketData we are dedicated to providing an unbiased overview of the Peer-to-Peer Lending market and platforms. Among other, in our mission to bring more transparency to the market for online lending we track over 70 platforms funding volumes.

When choosing the best platforms in a country we have considered a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).