business loan v mortgageSubmitted by Ram on Thu, 11/10/2011 - 11:27
You have chosen the absolute worst moment to try and borrow money in Italy. The banks need to preserve their liquidity and have virtually closed up shop on lending. However, for a business loan you will need to provide a mountain of paperwork. As it will be a new business, you wont be able to provide anything other than a business plan, which is going to make it even more difficult. Don't think about buying with a loan and setting up with aloan - it shows no serious intent for a lender. At least if you were to buy with your own money (for example) they would think you were serious. I fear that you will meet a brick wall everywhere. In Lazio there are no specific European funding schemes you can apply to either, as you arent in the 3rd world south. Even then they require an immense amount of application to enter into the graduatoria. It will come down to how much your income is, and the percentage of loan over your money that will be invested. If you are chucking everything up in another country to come here and start up a business you will have no hope at the moment in Italy of getting money, as you have no guaranteed income to offset the risk. Sorry to be so pessimistic but times could be better!
In reply to business loan v mortgage by Ram
business loans and mortgagesSubmitted by Boab64 on Thu, 11/10/2011 - 18:55
Ram, thank you very much for your honest asessment of the situation. I don't know your background so please excuse me if I am asking for too much from you, but, on the basis that we were to offer to buy a property whilst remaining in the uk, using our combined salaries as 'guarantee', could we buy using a residential mortgage. Using the place officially as a holiday home but slowly building the place up as a business so that it then becomes a de facto business after a while. Why would the banks find out and what would be the result once we had borrowed the money? This is all assuming we could get a residential mortgage in any event. Is there something in Italian residential mortgages about not using for commercial purposes. And if you do - so what? What can they do? On the basis of "what if", what does anyone think of that idea? Has anyone else got experience of taking out commercial loans or residential mortgages to start a business? Boab
If I were in your position, I would buy as residential and legitimately use it as B&B - for the wedding option, as you suggest, slowly build it up - to be honest once you've got the money the bank isnt going to come asking for it back. I would just make sure that I had good insurance via a different company from the bank. Your legal limit on any Italian mortgage is 80% of the value of the property. Obviously the higher the ratio between your money and the loan the greater the chance of getting a mortgage approved. Alot of foreign banks are now, as a matter of policy, not lending on agricultural property - ie anything in zone E - and that is proving very problematic, so alot depends where the property is. You have two options - get a mortgage in the UK on existing properties, or get a mortgage in ITaly for the new property. You can use a broker, or go direct to the banks. If you choose the Italian option, you will have to provide (usually in Italian) your last 2 years payslips, details of all current expenditure, contracts of work and so on. Most banks will tell you they will give you approval in 2 weeks, I have just taken out a small mortgage and it took 13 months.... so patience is a virtue! You can try Barclays - the online forms are also in ENglish, but this is one of the banks that has become allergic to rural properties. It also depends on how much money you are looking for. The smaller banks seem to not want to lend above 250K at the moment. If you are looking for something more substantial you will need to provide nearer 50% of the property price - depending on your joint incomes in the UK.
RegulationsSubmitted by La Dolcevita on Fri, 11/11/2011 - 03:55
Hi Boab, I'm not sure if you've done a B & B in the UK before or even how that compares to italy. What I do know is that there are countless regulations that you have to comply with (as in all countries) just one that I know of in Italy is that you need to have all bathrooms alarmed with a pull mechanism that automatically connects to your mobile so if someone has an accident they can contact you straight away. I'm sure there will be someone on here who has a B&B who can fill you in on the other regs so you can build these into your costings. I know there are a few B&B people on the Expats in Italy forum one of whom at least is from the UK who can help you with specifics Good Luck
Great advice from both RamSubmitted by Gala Placidia on Fri, 11/11/2011 - 07:36
Great advice from both Ram and La Dolcevita. It is not easy to get loans right now, not only in Italy but throughout the world. The banks have tighten their lending capabilities and it is quite difficult to ascertain your prospects under the current conditions. Think very carefully and envisage this as a business matter. Don't let your emotions rule the deal. Right now it is very difficult to survive for most businesses, but there is always an element of luck that you cannot control. Make sure that you are paying a reasonable price for the property and be careful calculating the cost of adapting it to your business. And when you have those costs worked out, multiply by three... there are always hidden costs, contingencies, etc. Also, make sure that you have enough money to operate at a loss for a few years. It is said that, if you can survive the first 4 years, you should be right. Perhaps you may think that I am a bit pesimistic; however, I am trying to play the role of the devil's advocate. We all have dreams, but we do not want them to turn into nightmares. In any case, I wish you lots of good luck and fortune.
Well, talk about restrictions.............. "maximum of only 3 bedrooms for guests min space for double room 14sq.mts min for single room 8 sq. mt.Only industrial foodstuffs with appropriate expiry dates etc can be served to guests " How on earth can new businesses develop and grow ?......blimey ! What great info we get on Italy Mag eh?, bravo sebastiano ! S
Thank you for your commentsSubmitted by Boab64 on Sun, 11/13/2011 - 07:19
Thank you folks for all your comments. It has been really helpful. On the basis that The ongoing economic situation should be seen as a challenge and not a brick wall, i intend to keep looking and so I do hope you will persevere with me if I continue to ask lots of questions. Thank you again. Its good to know there is a wealth of knowledge out there and good people willing to share it. Boab
b&b in lazioSubmitted by sebastiano on Mon, 11/14/2011 - 12:40
this is quite a long answer to yr.question but hopefully will put things into perpestive for you.firstly b&b as a concept is a relatively "new" appearance in what are called "strutture extra alberghiere"in italy.that is places which are NOT defineable as hotels but provide accomodation (like hostels,refuges,holiday appartments and houses,agriturismi ,affittacamere etc) each category has very specific requirements and or limitations.B&B was in fact started in Lazio to respond to the huge lodging demand during the vatican jubilee event a few years ago.Lazio was the first region to write down a specific regional law for this since used as a matrix for the other regions as this activity is governed by regional legislation.(see- legge regionale n°16 of the 24/10/08 -BUR 7 N° 41,5/30 of 11/2008 -Lazio Region) in simple language it says that the owner must be domiciled on the premesis,that there can be a maximum of only 3 bedrooms for guests min space for double room 14sq.mts min for single room 8 sq. mt.Only industrial foodstuffs with appropriate expiry dates etc can be served to guests as a normal household b&b does not have the sanitary requirements to cook/serve/store un prepared food.The house must have it's certificate of habitabilty,and all the heating /gas electrical systems certified to norm.This activity is NOT considered as a business ( no VAT number required) and has to be inactive (closed) for a minimum of 60 days per annum.Despite not being a business all incomes derived have to be declared in the "modello unico" tax declaration,and a simplified receipt matrix todemonstrate income kept by the owner.IF a stay exceeds the the sum of Euro 77,74 a government stamp of the value of Euro 1,81 must be put on the receipts.However you mentioned this place as a wedding venue this would put you right off the screen of the possibilities of a b&b.Firstly consider that a wedding venue would have to be able to accomodate at dining tables at least up to 500 people(the size of a pretty large wedding here,i went to a wedding the other month there were 350 guests and two other weddings going on at the same time!!),would require full industrial kitchens, requisites for the providing of food and beverages ( b&b's cannot serve meals or alcoholic drinks ,wines and spirits)in fact what you want to do is actually make a hotel!!! or are there things you didn't add to your question
other...Submitted by sebastiano on Tue, 11/15/2011 - 03:21
In reply to b&b in lazio by sebastiano
yes,you are all right the regulations differ from region to region,in fact i took those relative to Lazio because that's where he'd like to do this initiative. The fact is,and i presume similar to most european countries the rules concerning the purchase-preparation-cooking-storing of foodstuffs are quite stictly controlled just to give you an idea( although we are not a b&b) we had to have a full industrial kitchen,no heating allowed in the kitchen,open vent on floor level for gas escape emergencies,nearby fire extinguisher,H.A.C.C.P hygeine regime (it's the same as in all restaurants/hospitals here ( it's the law present also i believe in Britain concerning Health/hygeine/crtical points and angles)health inspection every 12 months ca.we have a chill blaster which allows us to freeze food down to -21°c then store it providing we label and date the foodstuffs involved,a walk in cold room,4 seperate freezers for different kinds of foods,our own preserves and processed foods are subjected to micro biological analysis every 6 months and certified (by a private lab) and samples are also taken by the health authorities.Obbligation ,as a business, VAT number and all fiscal obligations ,personel on national contracts with national health and accident insurance,premesis with third party insurance in case of accidents /injuries to staff/guests etc.fire brigade inspections anti fire regulations in place...it's all quite a lot of fuffing actuallyHowever one can imagine that businesses like ours (which is actually quite a small business could hardly accept ( given the extensive legislation in place to which we are obliged )that someone else comes along thinking they can just open up their house/building to guests serve foods (BTW B&B'S in the uk can also no longer serve for example home made jams/preserves as they do not possess the health requisites unless they have extended particular licences to do so)The point is that our friend here wants to open a fully licenced business here and to my mind would be better off searching for expert advice on the kind of business category which would be most appropriate for his needs/expectations ...there are other categories of "extra alberghiere" structures which would allow him to operate the kind of activity he is contemplating like perhaps "country house" for which there are other parameters (more similar to our own)i would also suggest that he visit some of the numerous wedding venues in Lazio to get an idea of what one is looking at ,see their facilities,find out under which category they are operating (i'm sure some would be more than happy to give some impartial advice providing they're not "round the corner" from where he wants to do this...
Do check regional variationsSubmitted by Tartuffa on Mon, 11/14/2011 - 15:02
Do check regional variations on the rules and regs as they vary hugely. For example in Abruzzo you can have 4 bedrooms and up to 10 guests at any one time. Your cornetti are still supposed to be 'pre confezionati' here but again I don't think that's true in Toscana or Puglia.
Rules and regsSubmitted by Ram on Tue, 11/15/2011 - 02:54
Tartuffa is absolutely right, the rules and regs differ hugely from region to region. Here in SIcily you dont even have to be resident on the premises - but within a range of 200m. Bed spaces are more, etc etc - There is also a sometimes very subtle difference between B&B, casa vacanze, affittacamera, and alberghi diffusi - one will require cooking facilities in the room, another a phone line and another a lemon squeezer. The big rule of thumb to follow is the food preparation bit - if you are going to serve non prepacked 'hygienic' food, you should have a certificate of alimentazione which you do in the province and which allows to you handle foodstuffs, and have a kitchen that should the H&S arrive will pass muster. Whether you then choose to offer home made jams and fresh bread is your choice. Obviously if you were thinking of a wedding venue with in house catering you would need the necessary certificates and kitchens - but that does not mean you couldnt have a BB as well - they would be separate businesses - the BB does not have to registered for IVA and is in the name of the householder, and the wedding business is a formal societa semplice in the partners name - two distinct and separate businesses that happen to share premises.
SELF-CONTAINED MINI APARTMENTSSubmitted by Gala Placidia on Tue, 11/15/2011 - 04:00
Perhaps, an easier form of establishing the business would be to offer self-contained mini-apartments with a kitchenette. This way, you avoid the food handling problem. When we went to Rome, earlier in the year, we rented an apartment near San Giovanni in Laterano which was made up of two smaller apartments, each one with its own facilities and kitchenette. That gave them lots of flexibility.
Interesting pointSubmitted by Badger on Tue, 11/15/2011 - 09:15
Interesting point Sebastiano: Only industrial foodstuffs with appropriate expiry dates etc can be served to guests A quick search on B&B in this area, shows quite a few offering home cooked food, evening meals on request, so do we presume they all have health certificates and if so how to check. Would think the fines are quite high if the guest gets salmonella or something similar.
b&b's....Submitted by sebastiano on Wed, 11/16/2011 - 03:17
In reply to Interesting point by Badger
due to the fact that some of the italian" categories" are rather obscure and unfamiliar to foreigners many places like "affittacamere/country house/agriturismi/ostelli/rifugi etc" also advertise them selves under the category of B&B on internet sites in order not to "lose" the potential trade of those simply seeking a lodging with breakfast ...so as Penny rightly says probably most of these would be actually registered under other categories of places.