Starting from May 15 organizations can use inventories, cash flows, patents and other things as collateral for bank loans.
The regulations for the Law on Secured Transactions are now ready and the law will take effect on May 15, and from that date, companies will be able to put up crops, agricultural machinery, copyrights, among other things, as collateral for the purpose of obtaining bank loans.
In Costa Rica the Secured Transactions Law which authorizes the use of intellectual property as collateral for loans will take effect in May 2015.
In an opinion piece published in Elfinancierocr.com, attorney Gabriela Miranda explains that in addition to allowing the use of movable property such as agricultural machinery and crops, the law has a broader scope, "...
Mortgage inventories, cash flow, contracts, intellectual property, trademarks, among others, can be used as an alternative option to traditional collateral on real estate.
Additionally, the law passed by the Legislature on April 30, also allows for current assets or rights given in contracts, equipment, accounts receivable, chattels, crops, tourist bookings and even future rights to the value of timber to be taken into account.
In Costa Rica the investors of Altara El Tucano Trust rejected a proposal for refinancing, leading to the subsequent execution of the guarantee and possible sale.
After having created a trust to issue debt of $7 million to buy the hotel, the group of investors rejected the option to suspend the execution of the guarantee, which uses as collateral the hotel, valued in an appraisal made in July 2012, at $16.5 million.
An announcement has been made for a funding line for micro, small and medium enterprises without collaterals such as mortgages, wage guarantees or financial analysis.
Using a methodology developed by Harvard University, which measures the skills, knowledge and abilities of the applicants, Costa Rica's Bancrédito bank will provide loans to small and medium enterprises.
Private banks in Costa Rica are opposed to the $30 million fund that protects small depositors being transferred to the Central Bank.
Nacion.com reports that "private banks are against transfer of the administration of the $30 million fund which protects small savers, in case of bankruptcy of a financial institution, to the Central Bank, as ordered by a Bill ruled on in the Economic Affairs Committee of Congress. "
A bill has been presented to the Legislature which will regulate the use of inventories, intangible assets and other movable assets as security for financing.
A statement from the MEIC reads:
San Jose, February 7, 2013. In order to increase access to credit, particularly for SMEs, the financial sector, the private sector and the Government, with the help of international consultants, over the last few months have been working on the basis for a proposed Law on Secured Transactions.
The two business associations that claim to represent the sector in Costa Rica are at odds over the fate of the $31 million held by the savings insurance fund.
Against the backdrop of a long-standing confrontation between the Costa Rican Banking Association (ABC), established in 1983, and the Chamber of Banking and Financial Institutions (CBF), founded in 1968, over which of the two unions represent the banking sector in Costa Rica, the Bill on Savings Insurance Act is giving rise to discussions that include charges of "unfair union practices."
The Mer-link system will guarantee the necessary participation and compliance in public bidding.
The new method will come into operation on January 24 with Banco Nacional , BCT, Lafise, Cathay, Promérica and Improsa as well as the National Insurance Institute.
Alicia Avendaño, Director of the Technical Department of the Digital Government, told La Nacion: "...
Principal and interests will be guaranteed through a contigency loan granted by the Central American Bank for Economic Integration to the issuing company.
“Partial Credit Guarantees” is the name of the project that CABEI is preparing to assist companies in accessing regulated capital markets in the Bank's member states.
David Castillo's article at Capitales.com, points that "the plan is similar to a Stand By Credit Letter or Safe Credit Letter.
SMEs in Costa Rica can receive guarantee backed funds for viable projects.
The Development Fund for Micro, Small and Medium Sized Enterprises (Fodemipyme) gave guarantees and assurances to six cooperatives and one bank for $8.5 million. These guarantees will be used by the institutions to cover up to 75% of each loan request after having evaluated the feasibility of the project for which the funds are requested.