Before you lend: a Colombian private-credit checklist

A property “backing” a loan means nothing until a mortgage (hipoteca) is registered in your favor at the Oficina de Registro de Instrumentos Públicos. Ask for the certificado de tradición y libertad (issued within the last 30 days) and read it: it shows the true owner, existing liens ahead of you, and embargoes. For vehicles, the equivalent is a registered prenda — and be careful when most of the “value” is really an operating license or permit, which can be non-transferable or revocable. If the collateral “hasn’t been chosen yet,” you are being asked to commit to nothing.

An LTV is only as real as the appraisal under it. A “commercial value” claimed by the borrower or the arranger is a negotiating number. Commission your own avalúo from a certified appraiser (Lonja-affiliated for property), and stress it: what would this asset fetch in a 90-day forced sale, not a patient one? A 60% LTV against an optimistic value can be 90% against a realistic one.

Interest-only with a bullet at maturity means the borrower pays small amounts for two years and then owes you everything at once — which usually means they plan to refinance or sell. Ask directly: where does the principal come from at maturity? An amortizing schedule reduces your exposure every month and proves capacity to pay. Both structures are legitimate; they carry different risks and should carry different rates.

Lending directly to a borrower you’ve verified is one thing. Handing funds to an arranger who pools “different investors” into loans is another: pooled arrangements are a regulated activity in Colombia (crowdfunding rules under financial-superintendency supervision), and an intermediary’s spread comes out of your yield — when an arranger offers you 14%, ask what the borrower is actually paying. On this platform, introductions are direct: you negotiate with the borrower, and whatever rate you agree is entirely yours.

Minimum kit: a pagaré (promissory note) signed by the borrower, the registered hipoteca or prenda in your favor, and disbursement through traceable channels — ideally against registration, via a fiduciaria or escrow arrangement. Confirm identity and do basic background checks. And go in knowing the exit: enforcing a mortgage in Colombia works, but foreclosure through the courts takes years, not months — price that patience into your rate.

Executed Colombian private loans follow a recognizable template — a contrato de mutuo with these mechanisms. If a draft in front of you is missing several of them, that’s a signal, not a style choice:

• Conditional disbursement: the money moves only after the guarantees exist — the signed pagaré and the hipoteca registered by escritura pública against the property’s matrícula inmobiliaria. Never fund first and paper later.
• Hipoteca abierta sin límite de cuantía: an open, uncapped mortgage that also covers later amendments to the loan — the standard form for this market. Guarantee costs (notary, registration) are customarily the borrower’s.
• Mérito ejecutivo: the contract and pagaré self-qualify as executive titles, unlocking Colombia’s fast-track proceso ejecutivo on default instead of years of ordinary litigation. This clause is the difference between a claim and leverage.
• Cláusula aceleratoria: on any uncured default the entire debt becomes immediately payable, no prior court order needed — paired with a short cure period (5 days’ notice is common).
• Cláusula penal: a contractual penalty (20% of the loan is a common figure) owed on top of principal for uncured breach.
• Moratory interest at the legal maximum certified by the Superintendencia Financiera — pre-agreed, not negotiated at default time.
• Notarial reconocimiento de firma y contenido for both signatures, and disbursement through traceable channels — a fiduciaria account is the clean practice.
• A dispute ladder that avoids ordinary courts: conciliación at the Cámara de Comercio, then arbitration in law with the loser paying. And watch for a separate arranger-commission clause charged to the borrower — that is the intermediary spread, in writing, on top of your interest.

• Urgency — “we need creditors lined up very soon” is pressure, not diligence.
• Commitment requested before collateral exists or is chosen.
• Valuations asserted, not documented — no independent appraisal offered.
• Collateral whose value is mostly a license, permit, or concession.
• “Guaranteed” returns, or yields quoted with no mention of what the borrower pays.
• No mention of lien registration, escrow, or what happens on default.