lending fintech
Lending fintechs and BNPL
"A consumer credit or buy now, pay later (BNPL) platform that provides financing professionally needs an EFC, or an EFC-EP if it also handles the payments."
EFC License in Spain (Financial Credit Establishment)
We set up your financial credit establishment and obtain its license so you can offer consumer credit, factoring, leasing or guarantees without being a bank. Authorization is granted by the Ministry after reports from the Bank of Spain and SEPBLAC; supervision falls to the Bank of Spain. Capital of €5,000,000, with the option of a hybrid EFC (EFC-EP / EFC-EDE) if you also want to provide payment services or issue electronic money.
Free consultation
We reply in less than 24 h
- Minimum share capital
- €5,000,000
- Decision timeline
- 3 months
- Key legislation
- Law 5/2015
Services
What setting up your EFC involves
Six building blocks that structure the creation and authorization of a financial credit establishment, from choosing the vehicle and the activities to registration with the Bank of Spain and the start of lending.
Vehicle
EFC, bank or payment institution? Designing the vehicle
We analyze whether your business model fits an EFC, a hybrid EFC (EFC-EP / EFC-EDE) or another type of entity. Lending without taking deposits is exactly the EFC's territory, with requirements far lower than a bank's.
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EFCEFC-EPEFC-EDE
Authorization
Authorization and program of activities
We prepare the application with the program of activities under Article 6 of Law 5/2015, the capital justification and the prior deposit. The Ministry decides on it after reports from the Bank of Spain and SEPBLAC.
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Art. 6program of activities
Fit and proper
Fit and proper requirements and qualifying holdings
We evidence the good repute, knowledge and experience of directors and senior managers, and the suitability of the main shareholders. The banking regime on qualifying holdings applies to EFCs.
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good reputeshareholders
Solvency
Solvency, own funds and corporate governance
We design the solvency framework (based on banking regulation and the CRR), the liquidity buffer and corporate governance proportionate to the EFC's size.
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own fundsliquidity buffer
AML/CFT
Anti-money laundering and SEPBLAC
We implement the anti-money laundering framework, which is subject to SEPBLAC's report within the EFC authorization procedure, with an AML/CFT manual, an internal control body and KYC procedures.
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SEPBLACKYC
Hybrid
Hybrid EFC and Bank of Spain registration
If you also want to provide payment services or issue electronic money, we handle the EFC-EP or EFC-EDE application with a single authorization and entry in the Bank of Spain's registers.
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EFC-EPBank of Spain register
Profiles
Who an EFC is the right fit for
Lending fintechs, consumer finance companies, BNPL platforms, factoring or leasing: the EFC is the vehicle for lending professionally without taking on the cost and burden of a banking license.
consumer
Consumer or auto finance company
"Finance companies specializing in consumer credit, cards or vehicle financing operate as EFCs, under Bank of Spain supervision and without taking deposits."
factoring / leasing
Factoring, confirming and leasing
"Invoice financing (factoring), reverse factoring (confirming) and finance leasing are typical EFC activities, within the list in Article 6 of Law 5/2015."
lending without a bank
A group that wants to lend without being a bank
"An industrial or commercial group that wants to finance its customers professionally finds a regulated route in the EFC, with far less capital than a credit institution needs."
Why it matters
Why isn't an EFC a shortcut to a banking license?
Taking deposits without a license, underestimating capital or solvency, or starting operations before registration: these are the mistakes that most often stall an EFC project, and expose it the most.
No deposit-taking: an EFC is prohibited from raising repayable funds from the public. Doing so encroaches on the activity reserved to banks and is a serious infringement.
Capital
€5,000,000
Minimum share capital of €5 million, fully paid up in cash, plus a prior deposit of 20% (€1,000,000) with the Bank of Spain.
Timeline
3 months
The application is decided within 3 months (12 at most). After that, there is one year to incorporate the company and enter it in the Bank of Spain's special register.
Registration before operating: the EFC cannot start operating until it is entered in the Bank of Spain's special register of EFCs, after the Commercial Registry.
Fit and proper requirements and qualifying holdings: the banking rules on directors' good repute and the suitability of major shareholders apply.
Bank-style solvency: the EFC is governed by the solvency rules for credit institutions (CRR) and must maintain a liquidity buffer.
Want to lend without being a bank?
The EFC is the regulated route to provide credit, factoring, leasing or guarantees with far less capital than a bank. Before you start, it is worth pinning down the activities, the capital and the authorization and registration timeline.
Frequently asked questions
EFC: common questions
What is a financial credit establishment?
It is an entity that, without being considered a bank, engages professionally in one or more of the lending activities listed in Article 6 of Law 5/2015 (consumer credit, factoring, leasing, guarantees, means of payment).
Its defining feature is that it cannot take deposits from the public. It is supervised by the Bank of Spain.
What can it do, and what can't it do?
It can grant loans and credit, provide factoring and leasing, issue guarantees and sureties, and issue and manage means of payment. It cannot raise repayable funds from the public (deposits, loans from the public, etc.).
To provide payment services or issue electronic money, it needs to be a hybrid EFC (EFC-EP or EFC-EDE).
Who authorizes an EFC?
Authorization is granted by the competent Ministry (the application is processed by the General Secretariat of the Treasury), after reports from the Bank of Spain and SEPBLAC. Ongoing supervision is the responsibility of the Bank of Spain, which keeps the special register of EFCs.
How much capital do I need?
A minimum share capital of €5,000,000, fully paid up in cash and represented by registered shares. In addition, during the application process you must make a deposit of 20% of that capital (€1,000,000) with the Bank of Spain, in cash or government debt.
How long does authorization take?
The application must be decided within 3 months of receipt of the complete file and, in any event, within 12 months. Once authorized, there is a period of one year to execute the deed of incorporation, register the company in the Commercial Registry and then in the Bank of Spain's special register of EFCs.
What is a hybrid EFC (EFC-EP or EFC-EDE)?
An EFC that, in addition to lending, provides payment services (EFC-EP) or issues electronic money (EFC-EDE). It is obtained with a single specific authorization, and the entity is entered both in the special register of EFCs and in the register of payment institutions or electronic money institutions.
How does it differ from a bank?
The essential difference is that an EFC does not take deposits, so it is not a member of the Deposit Guarantee Fund and requires far less capital (€5 million, compared with a bank's). In return, its business is limited to the lending activities in Article 6.
Do banking rules apply to it?
To a large extent, yes. For matters not covered by its specific rules, the credit institution regime (Law 10/2014) applies to the EFC in areas such as qualifying holdings, fit and proper requirements for senior officers, corporate governance and solvency (CRR), with adjustments proportionate to its size.
People also ask
Deposits, factoring and activity in the EU
Can an EFC ever receive funds?
Not from the public in the form of deposits. It can receive funds from its own group, from shareholders with at least 5%, from securities issues with a maturity of more than one month, and from security deposits linked to its activity. None of this counts as deposit-taking.
What are factoring and leasing as EFC activities?
Factoring is the advance payment and collection management of invoices, with or without recourse. Leasing (finance leasing) is the financing of assets with a purchase option. Both, together with their ancillary activities, are in the Article 6 list.
Is an EFC a member of the Deposit Guarantee Fund?
No. As it does not take deposits from the public, an EFC is not part of the Deposit Guarantee Fund, unlike banks.
Can an EFC provide payment services?
Yes, as an EFC-EP (hybrid payment institution). Likewise, it can issue electronic money as an EFC-EDE. In both cases, with a specific authorization and entry in the relevant Bank of Spain register.
What solvency requirements apply to an EFC?
It is governed by the solvency rules for credit institutions (Law 10/2014 and Regulation (EU) 575/2013, CRR), with adjustments, and must maintain a buffer of high-quality liquid assets to withstand periods of stress.
Can an EFC operate in other EU countries?
An EFC does not have the EU passport of credit institutions, because it does not qualify as one. Its cross-border activity, whether through a branch or the free provision of services, requires prior authorization from the Bank of Spain.
Where the EFC fits
EFC, bank, payment institution or electronic money institution
All four are supervised entities, but only banks take deposits. The EFC is the vehicle for lending without that burden. Here is how it compares.
What defines an EFC
Compared with a bank, the EFC gives up deposit-taking in exchange for much lighter access. These are its key features.
- Business
- Consumer credit, factoring, leasing, guarantees and means of payment.
- Deposits
- It cannot raise repayable funds from the public.
- Capital
- €5,000,000, compared with much higher capital for a bank.
- Supervision
- Bank of Spain (authorization granted by the Ministry, with reports from the Bank of Spain and SEPBLAC).
How we run the project
Before incorporating anything, we pin down the Article 6 activities and decide whether a standard or hybrid EFC makes sense. That way, the capital and structure match your actual business.
- Diagnosis of the activities and the vehicle (EFC, EFC-EP or EFC-EDE).
- Capital, fit and proper requirements, solvency and the Bank of Spain deposit.
- Application, authorization and entry in the special register.
| Type of entity | Takes deposits? | Typical activity | Minimum capital | Authorized / supervised by |
|---|---|---|---|---|
| Bank (credit institution) | Yes | Lending, deposits and financial services | Much higher than an EFC | Authorized by the ECB on a proposal from the Bank of Spain |
| EFC | No | Consumer credit, factoring, leasing, guarantees | €5,000,000 | Ministry (Bank of Spain and SEPBLAC reports); supervised by the Bank of Spain |
| Payment institution (EP) | No | Payment services | Depends on the services | Bank of Spain |
| Electronic money institution (EMI) | No | Issuing electronic money | €350,000 | Bank of Spain |
Indicative table for information purposes. The EFC regime derives from Title II of Law 5/2015 and Royal Decree 309/2020; capital figures and procedures may vary and should be checked case by case with legal advice. This page is for information only and does not constitute legal advice.
Practical guide
How to set up an EFC: a practical guide
Setting up an EFC is not just filing an application: it means designing the activities, providing the capital, evidencing solvency and fitness, and obtaining authorization before registering and operating. The order of the steps matters.
Activities first, paperwork second
The Article 6 program of activities defines the EFC's scope and whether the hybrid model makes sense. It is the first decision and shapes everything else.
€5 million and a prior deposit
The €5 million capital must be fully paid up, and a 20% deposit must be made with the Bank of Spain during the application process.
No registration, no activity
Entry in the Bank of Spain's special register of EFCs, after the Commercial Registry, is the condition for starting operations.
Checklist: setting up an EFC in 10 steps
- Define the vehicle (EFC or hybrid EFC-EP/EFC-EDE) and the Article 6 activities.
- Prepare the incorporation of the public limited company (S.A.) with €5,000,000 in capital (simultaneous formation, registered shares).
- Prepare the program of activities and the business plan.
- Evidence the suitability of directors, senior managers and major shareholders.
- Design the organization, internal control and solvency framework (CRR).
- Make the 20% deposit (€1,000,000) with the Bank of Spain.
- File the application with the General Secretariat of the Treasury.
- Reports from the Bank of Spain and SEPBLAC, and decision by the Ministry (3 months, 12 at most).
- Execute the deed and register the company in the Commercial Registry and in the Bank of Spain's special register of EFCs.
- Start operating only after registration, under Bank of Spain supervision.
Does your model fit another type of entity better? See the banking license, the payment institution license or the electronic money institution. To control changes in shareholding, see qualifying holdings.
The EFC in operation
From vehicle to registration and operations
Setting up an EFC is an ordered sequence (vehicle, capital and fitness, deposit, application and authorization + registration) that culminates in entry in the Bank of Spain register. This is the path.
1) VehicleVehicle and activities
Standard or hybrid EFC (EFC-EP / EFC-EDE), and selection of the Article 6 activities to be included in the program of activities.
- EFC vs hybrid
- Art. 6 activities
- program of activities
2) Capital + fitnessCapital, fitness and solvency
€5 million in paid-up capital, suitability of directors and major shareholders, and a solvency framework based on banking regulation.
- capital €5,000,000
- fitness and shareholders
- solvency (CRR)
3) DepositDeposit with the Bank of Spain
Making the prior deposit of 20% of the capital (€1,000,000) in cash or government debt, a requirement for the authorization application.
- 20% of capital
- cash or government debt
- application requirement
4) Authorization + registrationAuthorization, registration and start
The application is filed with the Treasury; the Bank of Spain and SEPBLAC issue reports and the Ministry decides (3 months, 12 at most). After authorization come the deed, the Commercial Registry and the Bank of Spain's special register, and only then the start of operations.
Tip: the 20% deposit and the capital must be ready before you file the application; this speeds up the process.
Quick decisionMap: standard or hybrid EFC?
credit only
EFC: consumer credit, factoring, leasing and guarantees, without payment services.
credit + payments
EFC-EP: adds payment services, with a single authorization and dual registration.
credit + e-money
EFC-EDE: adds the issuance of electronic money, also as a hybrid entity.
Playbook
The Article 6 activities
Loans and credit
Consumer, mortgage and commercial credit, including revolving credit.
This is the core of the EFC's business.
Factoring
Advance payment and collection management of invoices, with or without recourse, and confirming.
Together with its ancillary activities.
Finance leasing
Leasing: financing of assets with a purchase option at the end of the term.
Includes ancillary activities.
Guarantees and sureties
Granting guarantees, sureties and other forms of security in favor of customers.
Reduces the risk of the customer's transactions.
Means of payment
Issuing and managing cards and other payment instruments.
For payment services, a hybrid EFC-EP.
Common mistakes that stall the project
Anticipate them before filing the application to avoid requests for information and delays.
- Designing the model around raising funds from the public, encroaching on the activity reserved to banks.
- Underestimating the €5 million capital or not having the 20% deposit ready.
- Underestimating the bank-style solvency requirements and liquidity buffer.
- Failing to evidence the suitability of directors and major shareholders.
- Starting operations before entry in the Bank of Spain's special register.
Working glossary
Key concepts: EFC
If you are considering setting up a finance company or a lending fintech, these terms appear in the program of activities, in the application and in your dealings with the Bank of Spain.
EFCbasics
Financial credit establishment
Entity that lends professionally (consumer credit, factoring, leasing, guarantees) without being a bank and without taking deposits from the public. Supervised by the Bank of Spain.
Law 5/2015 (Title II); Royal Decree 309/2020.
not a bankstatus
Credit institution
Since 2014, an EFC has not been classed as a credit institution, as it does not take deposits. That is why it does not have the banking EU passport, although many banking rules apply to it.
Key distinction from a bank.
depositsprohibition
Raising repayable funds
Taking deposits, loans from the public or similar funds is reserved to banks. The EFC is prohibited from doing so, except from specified sources (group, shareholders with ≥5%, securities issues).
Activity reserved to banks.
hybridEFC-EP/EDE
Hybrid EFC
EFC that also provides payment services (EFC-EP) or issues electronic money (EFC-EDE). A single authorization and entry in both Bank of Spain registers.
Royal Decree 309/2020 and payments regulation.
factoringactivity
Factoring
Advance payment and collection management of invoices, with or without recourse. Together with confirming, it is one of the EFC's typical lending activities.
Art. 6 of Law 5/2015.
leasingactivity
Finance leasing
Financing an asset by leasing it with a purchase option at the end of the contract. It is a core EFC activity.
With ancillary activities.
registerBank of Spain
Special register of EFCs
Bank of Spain register in which the EFC must be entered, after the Commercial Registry, before starting operations. Registration is a requirement to operate.
Condition for starting operations.
liquiditysolvency
Liquidity buffer
Pool of liquid assets of high credit quality that the EFC must hold to meet its cash outflows in periods of instability.
Introduced by Royal Decree 309/2020.
SEPBLACAML/CFT
SEPBLAC
Executive Service of the Commission for the Prevention of Money Laundering. It issues a report within the EFC authorization procedure and supervises its AML/CFT framework.
Mandatory report in the authorization process.
Downloadable guide
Guide to setting up a financial credit establishment
A practical guide to launching your EFC: which Article 6 activities to choose, when the hybrid model makes sense, what capital and solvency you need, and how authorization by the Ministry and registration with the Bank of Spain work.
- EFC vs bank and payment institution
- Capital, prior deposit and solvency (CRR)
- Ministry authorization and Bank of Spain registration
Tell us about your EFC project
Tell us what kind of credit you want to provide (consumer credit, factoring, leasing, guarantees or BNPL) and we will tell you whether it fits an EFC or a hybrid EFC, with what capital and on what timeline before the Ministry and the Bank of Spain.
Regulatory framework for financial credit establishments
A financial credit establishment (EFC) is an entity that lends professionally without being considered a bank and without taking deposits from the public. Its regime is set out in Title II of Law 5/2015 on the promotion of business financing (Arts. 6–12), implemented by Royal Decree 309/2020. Although it is not a credit institution, much of banking regulation applies to it.
Activities and reserved activity
An EFC can carry out the activities in Article 6 of Law 5/2015: loans and credit, factoring, finance leasing, guarantees and sureties, and issuing and managing means of payment. It is prohibited from raising repayable funds from the public, except from specified sources (its group, shareholders with at least 5%, securities issues with a maturity of more than one month, and security deposits linked to its activity).
Authorization and registration
Authorization is granted by the competent Ministry, with the application processed by the General Secretariat of the Treasury, after reports from the Bank of Spain and SEPBLAC. The EFC must take the form of a public limited company (S.A.), with a minimum share capital of €5,000,000, fully paid up, and a prior deposit of 20% with the Bank of Spain. The application is decided within 3 months (12 at most) and, after authorization, there is one year to incorporate the company and register it in the Commercial Registry and in the Bank of Spain's special register of EFCs.
Hybrid EFC
If it also provides payment services or issues electronic money, the EFC can be a hybrid entity (EFC-EP or EFC-EDE), with a single specific authorization and entry in the relevant Bank of Spain registers.
Solvency and supervision
Supervision is the responsibility of the Bank of Spain. For matters not covered by its specific rules, the credit institution regime (Law 10/2014 and Regulation (EU) 575/2013, CRR) applies to the EFC in areas such as qualifying holdings, fit and proper requirements, corporate governance and solvency, in addition to the liquidity buffer. The EFC does not have the banking EU passport.
Entities and licenses
Payments and open banking
Related areas
Official sources
Key legislation, linked to the official text:
- Law 5/2015 of April 27 on the Promotion of Business FinancingBOE · consolidated text
- Royal Decree 309/2020 of February 11 on the Legal Regime of Financial Credit EstablishmentsBOE · consolidated text
- Law 10/2014 of June 26 on the Regulation, Supervision and Solvency of Credit InstitutionsBOE · consolidated text
Legislation and links reviewed in .