Table of Contents (20)
- Credit Policies
- What is a credit policy for companies and how does it work?
- Characteristics of credit policies
- What are the benefits of a credit policy for companies?
- Notary for credit policies in Barcelona
- Steps to manage a credit policy for companies
- Documents to sign credit policies before a Notary
- Commissions and interest on credit policies
- What interest must be paid on a credit policy?
- What is the availability commission in a credit policy?
- What is the opening commission in a credit policy?
- What is the renewal commission in a credit policy?
- What is the commission for claiming debtor positions in a credit policy?
- What is a cancellation or early repayment fee?
- What is the interest on novation or modification of conditions?
- What is the default interest on a credit policy?
- Price and online procedure for the credit policy
- What is the cost of signing a credit policy before a Notary?
- Sign a credit policy online before a Notary
- Processing a credit policy with JLA Notarios
Credit Policies
Credit policies are one of the most popular financial products among companies and self-employed individuals. This procedure, which can be signed at our Notary Office in Barcelona or online from your own home or business anywhere in Spain, often raises many questions for our clients.
That is why, at JLA Notarios, we are going to break down the information about them so that you have all the possible information, and we strongly invite you to read this. We are a notary office for business financing specialised in the processing of credit policies before a notary and we want to explain what notarial credit policies are, their most relevant characteristics and advantages compared to other financial products such as the loan policy, leasing policies, renting policies, etc…
What is a credit policy for companies and how does it work?
The credit line is a financial product, intended mainly for companies and self-employed individuals, so that they can use it to meet their treasury and working capital needs. The financial institution stipulates a maximum amount of money for the company to have at its disposal.
Characteristics of credit policies
The company can use the money stipulated in the credit line, either in full or in part, without any repayment instalments. Whenever it wishes, the company can amortise and cancel the credit line, returning the amount of money used from the total granted by the credit line.
There may be opening fees that become effective when starting the operation or upon its renewals. There are also availability costs (for the unused percentage), fees for exceeding the credit balance, and cancellation fees when a company wants to terminate the credit line before the agreed term.
The bank granting the credit line applies interest on the average balance used by the company, which depends on the company’s financial situation and the economic situation at the time the credit line is signed, so the cost may vary according to the economic moment, the Euribor, the financial institution, and the conditions negotiated for each credit line.
Credit lines for companies usually have a short duration, generally one year, although they can have a shorter duration. When the agreed period ends, the credit line can be renewed (in which case the conditions can be modified if desired and negotiated with the financial institution) or cancelled. In cases of renewal, banks carry out solvency analyses and may modify amounts, conditions, interest rates, and fees. It is also possible to agree on the automatic renewal of the credit line.
The operation of this credit line is similar to that of a current account: it allows us to deposit and withdraw money whenever convenient, with the particularity that the amount used must be repaid along with interest accrued during the time the money was outstanding.
What are the benefits of a credit policy for companies?
The credit line is a form of bank financing that offers various benefits:
- Interest is paid only on the portion of the money that has been used, with a lower commission paid on the unused amount. Therefore, the credit line is usually cheaper than a loan if it is not certain that all the money will be used
- If it is used gradually, interest can be paid progressively
- It helps to cover specific needs at a low cost. Therefore, it is widely used in industrial and agricultural businesses
- It adapts to the needs of companies, as money is drawn upon as it becomes necessary
- It offers the possibility of an automatic annual renewal, allowing the initial amount to be available again
- It avoids indebtedness, having credit available in case of exceptional needs
Notary for credit policies in Barcelona
What is the role of the Notary in a credit policy?
It is common for banking institutions to require companies to go to a notary to manage credit policies in order to record the operation that the company is managing with the banking institution. Before signing, the Notary will review the requirements and conditions, amount, terms, and especially the fees that the company must pay to the bank in relation to the consumption of funds established according to the client's needs.
The role of the Notary in the processing of a credit policy for companies is one of intervention, as they certify that the persons who execute a credit policy have signed it before him or her and have freely given their consent to the commercial contract. It is also the last moment in which the company requesting the policy can verify that the conditions they are about to sign are indeed those agreed upon with the financial institution. Signing before a Notary ensures the truthfulness and integrity of the policy according to the provisions of the Law.
At JLA Notarios we will explain and resolve any doubts or uncertainties that the content of the credit policy may cause before signing. We will especially focus on those clauses that may create confusion or have an economic impact on the parties signing the agreement.
Steps to manage a credit policy for companies
To manage a credit policy, the company and the financial institution must reach an agreement, which, after approval by the bank, will be formalised as the credit policy before a Notary.
Therefore, a credit policy must contain:
- the details of the financial institution granting the policy and of the company or individual benefiting from the policy
- the amount granted
- the maturity period
- the commissions and interests mentioned above
Documents to sign credit policies before a Notary
If you are going to sign a credit policy, do not forget:
- Identification document: DNI, passport, residence card or NIE of the signatories
- Send or take the policy document to the notary's office
Furthermore, in the case that a company signs the policy, the following will be required:
- Authentic copy of the public deed of incorporation of a company and the deed accrediting the representative powers of the person who will attend the notary's office
- Real ownership certificate
- Only in some cases where necessary, the shareholders' meeting agreement authorising the operation.
However, at JLA Notarios we can obtain your company's information from the Mercantile Registry and avoid bringing these original documents.
Commissions and interest on credit policies
Let's see what commissions and costs are usually involved in a credit policy.
What interest must be paid on a credit policy?
In credit policies, interest must always be paid on the drawn balance. This interest is paid on the amount of credit used and for the time that money has been used. The amount of interest must be expressly stated in the credit policy and is one of the matters that the Notary will explain to you in detail.
Therefore, the interest in credit policies can be understood as the commission paid for the amount of credit that has actually been used.
What is the availability commission in a credit policy?
Alongside the interest on the utilised balance, credit policies include an availability commission that is paid on the credit balance that has not been drawn down. It is a commission paid to the bank for the unused credit money, and serves to remunerate the bank for making available to a client an amount of money that has not been used.
This availability commission on credit policies can be understood as the commission that remunerates the bank's obligation to allow a client to use an amount of money over a period of time. It is the main remuneration for financial institutions in a credit policy alongside the policy interest, and it is one of the matters the Notary will emphasise when explaining your policy.
What is the opening commission in a credit policy?
The opening commission on a credit policy is a commission that may or may not be present in your credit policy. If this commission is established in your policy, it must be paid in a single payment at the moment you activate your policy. In cases where this commission is established, the amount is usually between 0.5% and 1.5% of the credit amount.
What is the renewal commission in a credit policy?
The renewal commission of a credit policy is a commission that may or may not be included in a credit policy. If it is included in a credit policy, it will mean that if the policy's validity period expires, the renewal of the policy is automatically extended, paying at the time of renewal the renewal commission set out in the credit policy document.
If your credit policy includes an automatic renewal and a renewal commission, to avoid renewing your policy you must notify the financial institution that granted the credit in writing.
What is the commission for claiming debtor positions in a credit policy?
The commission for claims on debtor positions in a credit policy is a fixed amount, usually ranging between 30 and 60 euros, which must be paid to the bank in case any amount owed to the bank under the signed credit policy has not been paid on time.
What is a cancellation or early repayment fee?
The early repayment or cancellation fee is the amount the bank receives in the event of closing the credit line before the scheduled term, as a consequence of the loss of potential interest that the bank could have earned, as well as the costs of closing the credit.
This fee can reach up to 2% of the credit balance.
What is the interest on novation or modification of conditions?
Although conditions may have been agreed upon in the credit policy, the client can subsequently negotiate these agreements, modify the interest rate, available capital or term. This often involves a commission of up to 2%.
What is the default interest on a credit policy?
Default interest on a credit policy is the interest that must be paid to the bank in case of failure to meet the agreed repayment deadlines. In the event of delays in the repayment of any amount derived from a credit policy, the default interest specified in the contract will apply, replacing the ordinary interest.
The amount of the default interest will be that stated in the credit policy, but if the person receiving the credit is an individual, it may not exceed the ordinary interest by more than 3 percentage points.
Price and online procedure for the credit policy
What are the costs and interest rates of credit policies?
Previously we have discussed the costs of credit policies. These are presented in the form of commissions. Among them we find the commissions for:
- Opening: paid at the beginning of the operation, at the time of contracting
- Annual review: this cost occurs with each renewal of the policy
- Availability: costs related to the percentage of the policy that has not been used
- Exceeded balance: a commission applied if the credit limit is exceeded
- Cancellation: a penalty applied by certain entities when cancelling the credit account before the agreed term
In addition, the contracting costs of the policies themselves must be taken into account.
On the other hand, if we focus on the interest of a credit policy, this will depend on the bank, the credit conditions and the limits of the policy. The interest on credit policies is normally paid monthly or quarterly. For its calculation, the interest must be applied to the amount of credit drawn down.
What is the cost of signing a credit policy before a Notary?
The price of notarial acts is regulated by the Government and complies with the regulatory framework of the NOTARIAL FEE SCHEDULE (RD 1426/1989, of 17 November, regulating the Notaries' Fee Schedule).
However, the exact price of a notarial document cannot be calculated until its specific content is known, that is, until it is signed, as there are many circumstances that can cause it to vary. The number of copies requested of a document, the pages it contains, as well as possible changes or additions, can slightly alter the final price. The factor that most influences the price of a credit policy before a Notary is the amount of the credit. It also affects the price of a credit policy in notary if there is credit guarantee or not, since if guarantors intervene in the policy, the cost of the policy, according to the law regulating the notarial fee schedule, must be increased by 50 percent.
If you wish to receive a detailed quote, we invite you to contact us directly through the channel that is most convenient for you. You can do so via the contact form on the main page of this website, through the contact section found in the footer of the website, using the direct WhatsApp access at the bottom right of this page, by sending an email to bcn@jlanotarios.com or by calling us at 93 159 17 62.
As a guideline, we can inform you that according to the current regulatory framework, the usual price for formalising a CREDIT POLICY for a credit amount of €20,000 is approximately €100, including VAT. The approximate price of a credit policy before a notary for €50,000 is around €200, and the price of a notarial policy for a credit of €100,000 is about €375.
This indicative price is calculated for a document with usual content, with a maturity exceeding 6 months and without guarantee.
Sign a credit policy online before a Notary
Since 9 November 2023 and due to the approval of Law 11/2023, of 8 May, JLA Notarios stands out for processing the notarial signing of credit policies by videoconference among many other notarial documents. Among the advantages of our digital notary service are streamlining procedures and offering greater convenience to our clients, avoiding travel.
Likewise, other benefits such as permanent access to electronic copies authorised by the Notary should be highlighted.
In the case of policies, the presence of the financial institution is not necessary if it sends the policy to the notarial electronic headquarters.
The digitalisation of the Public Administration is welcomed by JLA Notarios, since from our Notary Office in Barcelona we strongly support technological implementation. This means greater security, better document traceability and efficiency in procedures.
The use of videoconferencing to sign credit policies means being able to access a Notary freely chosen, regardless of where you live. So remember that, even if you are anywhere in Spain other than Barcelona, you can process a credit policy signing with us, signing by videoconference, with a completely modern and digital process.
More frequently asked questions related to credit policies
Any individual, self-employed person or company can request the opening of a credit account from their bank or another financial institution. For its approval, they must demonstrate their solvency to the institution or offer additional guarantees. The assessment of the appropriateness of granting the credit corresponds to the financial institution.
The maximum amount that a company can obtain depends on various factors. Among them are the different maximum amount policies of financial institutions, the business's credit history, its income and payment capacity, or the guarantees offered to banking entities. Therefore, the amount to be obtained will depend both on the business and on the policy of the financial institution.
Credit policies are ideal for covering occasional fluctuations that may occur in the treasury of any type of business, including SMEs and self-employed individuals. In this case, a clear example would be the quarterly VAT settlements.
It is important to avoid using them incorrectly, as if we abuse the use of credit policies, the business's cash flow will be constantly negative and we will cause the company to become indebted. For this reason, it is recommended not to finance the purchase of fixed assets or unpaid customer invoices. Managing these payments with a credit policy would be a sign of poor business health and, on the contrary, they should be settled with own funds or other financing such as leasing or loans.
It is common for credit policies to be used in industrial or agricultural businesses that have peaks in expenses, derived for example from covering the harvest at a specific time or the purchase of goods at a single moment of the year.
As we have mentioned, the duration of the credit policy is usually between one and three years and renewal can be agreed upon. If it is not included in the contract, the company may request it, negotiating new conditions, and the financial institution may accept or deny the modifications. According to Law 5/2015, of 27 April in its article 1, it is stipulated that the beneficiary has the right to be informed of the renewal of the policy upon its expiry and under the conditions, obliging the bank to notify its extension three months in advance.
Signing before a Notary offers legal security so that all parties involved understand the terms and conditions of the credit policy. In addition to the authentication of signatures, the contract is publicly registered in the notarial archive. On the other hand, in case of breach of contract, signing before a notary facilitates the legal process. Thus, according to article 517.2.5 of the Law 1/2000, of 7 January of Civil Procedure, it is granted executive status, without the need to go through the evidentiary phase in a court, which would entail time and money advantages for the party complying with the credit policy.
Processing a credit policy with JLA Notarios
If you are going to sign a credit policy with a financial institution, you should know that you have the right to choose a Notary.
At JLA Notarios we are a notary office for policies in Barcelona and we stand out for the extensive training and broad experience of our entire team. As a result, we will offer you the most appropriate legal solution for your case, advising you free of charge in your consultations. Furthermore, JLA Notarios is a notary office specialised in the digital signing of credit policies by videoconference and completely online, allowing you to sign from your home or business, wherever you are, without travelling.
Our goal is to provide you with the highest level of personalised attention, resolve your doubts, and offer you the greatest possible profitability through close, cordial, and empathetic treatment, adapting new technologies in all procedures with the aim of shortening processing times. For this reason, we also stand out as an online notary that can process your credit policy electronically.
Get in contact with our team if you need a notary to process a credit policy in Barcelona and book your consultation. You have multiple channels on our website, from contact via WhatsApp, our telephone 93 159 17 62, to our email bcn@jlanotarios.com or the contact form.
By your side in the moments that matter
Contracts and property law
Over the course of our lives, we carry out important actions, such as buying a home, declaring a new-build, lifetime gifting to our children or ending partnerships, among many others.
At JLA Notarios we are experts in property and contract law and buying and selling property. We guide our clients, analysing each particular issue and always considering the tax burden of each transaction.
In addition, some of our notarial services can be performed online, so we can assist you from anywhere in Spain. Contact us to declare a new-build or a commonhold ownership structure online.
Inheritance and wills
The moment of granting a will, making a declaration of heirs or formalising an inheritance are very important moments in people's lives.
At JLA Notarios we offer services related to succession law, both to arrange your succession and to distribute an inheritance, guaranteeing the best advice tailored to your particular needs and the study of the tax implications of each case. At no time do we neglect the human factor, even offering home notary services if necessary.
Mortgage
Taking out a mortgage is one of the biggest moments for anyone. Just think of the fees and interest you may have to pay for much of your life. So it is essential to have a trusted notary to help you understand what you are signing, explaining the tricky legal terms and their future consequences in simple words, to provide transparency and protect our clients.
At JLA Notarios we are aware of the importance of giving complete and understandable information to people about to sign a mortgage, novation or subrogation. We also advise and guide you on your future mortgage cancellation.
Loan agreements and credit facilities
Individuals and companies often need money to fulfil their dreams or projects. This can be obtained by taking out a loan or credit facility with your bank. When you sign, it is essential to understand the details properly to avoid future surprises.
JLA Notarios can be your trusted notary office, giving you accurate advice on loan contracts, providing a very agile and specialised service for processing loan contracts.
Bear in mind that from 9 November 2023, you will be able to sign your loan contracts from anywhere in Spain electronically by videoconference with JLA Notarios, saving you time and money. Do not hesitate to contact us to find out more about the notary office’s services in order to sign a loan contract online or sign a credit facility online.
Companies
Without entrepreneurship there is no future, so it is of vital importance to support our businesspeople and entrepreneurs.
At JLA Notaries we are familiar with companies’ life cycle, which enables us to provide legal assistance for companies in their different stages, whether incorporation, modifications of their articles of association, changes of director, share sales and purchases, capital increases and reductions, dissolution and closure, and everything related to commercial matters.
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At JLA Notarios we make sure that you understand the significance and risks of delegating or revoking powers of attorney, from a special power of attorney or power of attorney for lawsuits, to general powers of attorney or preventive powers of attorney for cases of incapacity.
We provide an agile service to sign powers of attorney. You can take your copy away immediately, saving you unnecessary trips, and from 9 November 2023 our clients will be able to sign all powers of attorney that are not general or preventive by videoconference through our digital notary office.
Family affairs
A prosperous society is based on the family and its protection. Family Law provides you with the tools to protect your family and its members, so its foundations are solid and its purposes can be achieved.
At JLA Notarios we provide legal advice on marriage or civil partnerships; property aspects of the family through marriage contracts or civil partnership contracts; the moments when the family relationship is ended, in cases such as divorce or separation; and protection of vulnerable people, such as minors or people with modified capacity, through deeds of appointment of guardians or executors or creation of protected assets. We do all of this in a way that makes everyone involved feel equally supported and secure.
Certifications and authentications
It is common knowledge that notaries attest. That important and simple action can guarantee things of vital importance, such as ensuring that the signature on a document is authentic or certifying that a copy of a document matches the original.
At JLA Notarios we will help you to certify a document or notarise a signature in accordance with the law and tailored to your specific needs.
In addition, these notarial procedures can be carried out conveniently through electronic means from 9 November 2023.
Minutes
How many times have you wanted to leave a record of an event, of a statement, of the condition in which an object is found, or notify someone of any matter. To provide a solution to these issues, the Law provides us with notarial records.
At JLA Notarios we adapt to you, reflecting in the record what you require and carrying out the notifications and requests that you demand.
Oath of Nationality
Behind every nationality oath there is a story of overcoming, sacrifice and waiting.
At JLA Notarios we understand what this moment means and offer an empathetic, agile and fast service, advising beyond the oath itself, anticipating the future requirements that the new Spanish citizen will need.
We are your reference Notary to carry out the nationality oath before a Notary in Barcelona.
Hague Apostille
One of the main effects of globalisation is the increase in international acts and transactions, and the exchange not only of information but also of documentation between different States and between individuals. Therefore, procedures that facilitate and speed up this exchange are necessary, as is the case with the Hague Apostille in Barcelona.
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Tax bureaucracy can cause a lot of headaches.
So JLA Notarios offers its clients the possibility of assessing and paying the many different taxes by the executing deeds and carrying out other procedures before the notary. We can also file them with the Land or Companies Registry so you do not have to concern yourself with it and can spend your time on the things that matter. We support you from start to finish.
Contracts and property law
Over the course of our lives, we carry out important actions, such as buying a home, declaring a new-build, lifetime gifting to our children or ending partnerships, among many others.
At JLA Notarios we are experts in property and contract law and buying and selling property. We guide our clients, analysing each particular issue and always considering the tax burden of each transaction.
In addition, some of our notarial services can be performed online, so we can assist you from anywhere in Spain. Contact us to declare a new-build or a commonhold ownership structure online.
Inheritance and wills
The moment of granting a will, making a declaration of heirs or formalising an inheritance are very important moments in people's lives.
At JLA Notarios we offer services related to succession law, both to arrange your succession and to distribute an inheritance, guaranteeing the best advice tailored to your particular needs and the study of the tax implications of each case. At no time do we neglect the human factor, even offering home notary services if necessary.
Mortgage
Taking out a mortgage is one of the biggest moments for anyone. Just think of the fees and interest you may have to pay for much of your life. So it is essential to have a trusted notary to help you understand what you are signing, explaining the tricky legal terms and their future consequences in simple words, to provide transparency and protect our clients.
At JLA Notarios we are aware of the importance of giving complete and understandable information to people about to sign a mortgage, novation or subrogation. We also advise and guide you on your future mortgage cancellation.
Loan agreements and credit facilities
Individuals and companies often need money to fulfil their dreams or projects. This can be obtained by taking out a loan or credit facility with your bank. When you sign, it is essential to understand the details properly to avoid future surprises.
JLA Notarios can be your trusted notary office, giving you accurate advice on loan contracts, providing a very agile and specialised service for processing loan contracts.
Bear in mind that from 9 November 2023, you will be able to sign your loan contracts from anywhere in Spain electronically by videoconference with JLA Notarios, saving you time and money. Do not hesitate to contact us to find out more about the notary office’s services in order to sign a loan contract online or sign a credit facility online.
Companies
Without entrepreneurship there is no future, so it is of vital importance to support our businesspeople and entrepreneurs.
At JLA Notaries we are familiar with companies’ life cycle, which enables us to provide legal assistance for companies in their different stages, whether incorporation, modifications of their articles of association, changes of director, share sales and purchases, capital increases and reductions, dissolution and closure, and everything related to commercial matters.
Powers of attorney
There are moments in life when a person needs to delegate. The law provides a tool for this: powers of attorney. Though a power of attorney, one person allows another person to act on their behalf.
At JLA Notarios we make sure that you understand the significance and risks of delegating or revoking powers of attorney, from a special power of attorney or power of attorney for lawsuits, to general powers of attorney or preventive powers of attorney for cases of incapacity.
We provide an agile service to sign powers of attorney. You can take your copy away immediately, saving you unnecessary trips, and from 9 November 2023 our clients will be able to sign all powers of attorney that are not general or preventive by videoconference through our digital notary office.
Family affairs
A prosperous society is based on the family and its protection. Family Law provides you with the tools to protect your family and its members, so its foundations are solid and its purposes can be achieved.
At JLA Notarios we provide legal advice on marriage or civil partnerships; property aspects of the family through marriage contracts or civil partnership contracts; the moments when the family relationship is ended, in cases such as divorce or separation; and protection of vulnerable people, such as minors or people with modified capacity, through deeds of appointment of guardians or executors or creation of protected assets. We do all of this in a way that makes everyone involved feel equally supported and secure.
Certifications and authentications
It is common knowledge that notaries attest. That important and simple action can guarantee things of vital importance, such as ensuring that the signature on a document is authentic or certifying that a copy of a document matches the original.
At JLA Notarios we will help you to certify a document or notarise a signature in accordance with the law and tailored to your specific needs.
In addition, these notarial procedures can be carried out conveniently through electronic means from 9 November 2023.
Minutes
How many times have you wanted to leave a record of an event, of a statement, of the condition in which an object is found, or notify someone of any matter. To provide a solution to these issues, the Law provides us with notarial records.
At JLA Notarios we adapt to you, reflecting in the record what you require and carrying out the notifications and requests that you demand.
Oath of Nationality
Behind every nationality oath there is a story of overcoming, sacrifice and waiting.
At JLA Notarios we understand what this moment means and offer an empathetic, agile and fast service, advising beyond the oath itself, anticipating the future requirements that the new Spanish citizen will need.
We are your reference Notary to carry out the nationality oath before a Notary in Barcelona.
Hague Apostille
One of the main effects of globalisation is the increase in international acts and transactions, and the exchange not only of information but also of documentation between different States and between individuals. Therefore, procedures that facilitate and speed up this exchange are necessary, as is the case with the Hague Apostille in Barcelona.
Tax and registry procedures
Tax bureaucracy can cause a lot of headaches.
So JLA Notarios offers its clients the possibility of assessing and paying the many different taxes by the executing deeds and carrying out other procedures before the notary. We can also file them with the Land or Companies Registry so you do not have to concern yourself with it and can spend your time on the things that matter. We support you from start to finish.
