Costa Rica Property-Backed Lending for Professional Capital

A disciplined Costa Rica lending channel for professional capital

GAP Investments welcomes confidential discussions with investment and retirement fund managers, family offices, private-credit managers, mortgage and real-estate debt funds, finance companies, and other professional capital providers interested in Costa Rica property-backed lending.

Many fund managers have never looked at Costa Rica, or do not know a channel like this exists. The objective is simple: build a dependable lending relationship around agreed standards, careful local review and a controlled legal closing. Each loan must stand on its own. Capital providers decide what fits their mandate, risk tolerance and documentation requirements.

Why work with GAP Investments?

GAP Investments focuses on the work that matters before capital is committed: finding suitable opportunities, coordinating the initial review, identifying the property security, examining title and existing liens, clarifying the borrower’s purpose and repayment plan, and supporting the legal closing process.

For the right capital partner, this can provide a local Costa Rica lending channel without rebuilding the same groundwork on every file.

Put a large allocation to work across many smaller loans

A fund does not have to source, review and close every loan itself. One approach is to allocate a block of capital, for example US$10 million or US$20 million, to be placed through GAP across many smaller first-lien loans, each starting at US$50,000. That spreads the allocation across many properties and borrowers rather than a few large loans.

How an allocation is set up is agreed case by case. A fund may set rules such as a maximum loan size (for example, US$250,000 per loan), a target rate, a maximum loan-to-value or preferred locations, and some funds hold the capital in a trust arrangement. The structure is documented with each party’s attorneys before any capital moves.

Capital is placed loan by loan as suitable loans become available, so GAP does not promise how quickly an allocation will be fully placed. Costa Rica also reserves financial intermediation, meaning habitually taking in money from the public to lend it for the intermediary’s own account and risk, to authorized entities (Law 7558, article 116). That is one more reason every structure is reviewed with Costa Rican counsel.

What a professional-capital relationship may include

• Lending criteria agreed in advance, such as loan size, rate, loan-to-value and location
• Property-backed loans selected against those criteria
• A first-lien position for the lender, confirmed in the legal documents and registration for each loan
• Review of ownership, title, liens, access, location, value and marketability
• Conservative loan-to-value: around 30% or less preferred, 50% maximum
• Clear attention to borrower purpose, payment source, maturity and repayment plan
• Experienced Costa Rica attorney/notary coordination for each closing
• Clear loan documents covering payments, maturity and late payment

Standard loans pay 9% to 16% a year, set loan by loan, over terms of six months to three years with interest-only payments. The lender receives the full agreed rate; borrowers pay the loan fees. A lower rate does not by itself make a loan safer, but GAP’s preferred range of 9% to 10% usually goes with more conservative collateral and leverage. GAP closes loans within 10 business days once the required documents are complete.

How GAP reviews a potential loan

1. Initial fit. We first consider the property, requested amount, proposed use of funds, borrower, term, and proposed repayment path.
2. Security review. The review looks at title, ownership, existing obligations, property access, realistic market value, location, and the ability to sell the property if necessary.
3. Closing structure. If the opportunity moves forward, the parties work through the legal documents, first-lien security, lien payoff requirements, funds flow, and closing instructions.
4. After closing. Borrowers pay the lender directly under the loan documents. GAP’s role is arranging each loan through closing, and GAP can help with communication if a borrower or lender reports a problem.

Is Costa Rica a sound place for client capital?

No country and no loan is free of risk, and each fund should reach its own conclusion. These are facts that usually matter in a fund’s due diligence:

• Equal legal standing for foreigners. Under article 19 of Costa Rica’s Constitution, foreigners have the same individual and social rights and duties as Costa Ricans, with the exceptions and limitations that the Constitution and the laws establish.
• A public property registry. By law, the purpose of Costa Rica’s National Registry is to guarantee the security of registered property and rights with respect to third parties by making them public (Law 3883, article 1).
• Enforceable US-dollar contracts. Contracts and obligations in foreign currency are valid, effective and enforceable under Law 7558, article 48, which also sets out when payment may be made in colones. Your attorney can explain how that applies to your structure.
• Enforceable mortgages. Under Law 8624, the Judicial Collection Law, a properly registered mortgage is an enforcement title over the mortgaged property (article 8), and the law sets out the court process for enforcing it, including auction.
• OECD membership. Costa Rica became the 38th member of the OECD on May 25, 2021, after a five-year accession process.

The real risks remain: borrower default, valuation, how long a property takes to sell, legal and enforcement timelines, currency and country risk. Conservative loan-to-value and first-lien security are how GAP loans are built to manage those risks; they are not guarantees.

Registration and compliance

A fund or company that lends in Costa Rica as an organized, habitual activity will likely need to register with SUGEF for anti-money-laundering purposes under Law 7786. Registration is not an authorization to operate. We walk capital providers through what it involves and connect them with independent Costa Rican attorneys and compliance professionals; see how to register with SUGEF as a private lender. Each fund should also confirm the rules of its own jurisdiction, including any that apply to retirement or client money.

A relationship can begin carefully and grow properly

A professional capital relationship does not need to begin with a large commitment or a one-size-fits-all structure. The sensible first step is a confidential discussion of the capital partner’s mandate, underwriting requirements, preferred loan size, geography, collateral standards, term and legal structure.

Selected loans can then be reviewed individually. If both sides are satisfied, the relationship may grow under an agreed and legally appropriate structure.

Who this page is for

• Investment and retirement fund managers with a private-credit or real-estate debt allocation
• Family offices with a private-credit or real-estate debt allocation
• Private-credit, mortgage, and real-estate debt fund managers
• Finance companies and professional capital providers
• Advisers or managers seeking a Costa Rica lending channel for qualified clients or mandates

Managing a larger mandate, such as a pension, retirement or private-credit fund? Large institutional commitments are handled directly by Grupo GAP, the parent company of GAP Investments. See Institutional Capital in Costa Rica.

Moving to Costa Rica with capital from a property sale back home? Individual lenders are welcome too; see how lending works.

Frequently asked questions

Does GAP Investments work with fund managers and professional capital providers?

Yes. GAP Investments welcomes confidential discussions with investment and retirement fund managers, family offices, private-credit managers, funds, finance companies, and other professional capital providers. The right structure depends on each organization’s mandate, underwriting requirements, and legal advice.

Can a fund allocate a large amount for GAP to place in many smaller loans?

Yes, that is the kind of relationship GAP is built for. The fund sets the rules, such as maximum loan size, rate and loan-to-value, and the structure is agreed case by case with attorneys. Capital is placed loan by loan as suitable loans are available, so the pace is not guaranteed.

Does a capital partner need to make a large commitment from the beginning?

No. A relationship can begin by reviewing selected loans one at a time. If both sides are satisfied with the standards, documentation, closing and results, it may grow under an agreed structure.

How are potential loans reviewed?

Before a capital provider decides whether to proceed, the review may include the property, ownership, title, existing liens, access, realistic value, location, loan-to-value, borrower purpose, payment source, maturity, and repayment plan. Each party should complete the due diligence it considers necessary.

Is every loan secured by a first-lien position?

Yes. GAP arranges first-lien loans only. Any existing liens are paid off before or at closing so the lender holds first position, and the closing attorney/notary confirms the security for each loan.

Does GAP Investments promise a return or a funding outcome?

No. GAP Investments is not a bank and does not promise a return, approval, funding amount, timing, placement pace, or outcome. Property-backed lending involves real borrower, title, valuation, market, liquidity, legal, enforcement, currency, and country-related risks.

Does GAP Investments pool capital as its standard model?

No. GAP Investments does not present pooled capital as its standard model. The appropriate structure, economics, and documentation must be agreed privately for each relationship with the right legal, tax, and investment advice.

Who do fund managers speak with?

Glenn handles conversations with funds and professional capital providers. You can email him at glenn@gap.cr or request the briefing below.

Important considerations

Each capital provider should use its own legal, tax, and investment advisers and complete its own due diligence. The appropriate structure, economics, and documentation must be agreed privately for each relationship.

Request the Institutional Lender Briefing

A two-page overview of how GAP Investments works with fund capital: loan terms, how an allocation can be set up, the review and closing process, the legal framework and the risks. Tell us where to send it and Glenn will be in touch.

Prefer to talk first? Email Glenn at glenn@gap.cr.