Collecting Money Owed to a Small Business From Spain: The Legal Process

When a €40,000 invoice goes unpaid, a multinational adjusts a spreadsheet. A small business owner loses sleep. The proportional impact of unpaid international debts on small businesses is savage — a single defaulting Spanish client can represent 10–20% of annual revenue. And yet, most small business owners assume that cross-border debt recovery is something only large companies can afford to pursue.

That assumption is wrong. Spain's legal framework for debt recovery doesn't discriminate by creditor size. The monitorio procedure costs the same whether you're a Fortune 500 company or a 15-person engineering firm. And professional collection agencies operating on no-win, no-fee terms charge nothing unless they recover your money.

The Process, Scaled for Small Business

Step 1: Stop chasing internally. The hours you're spending on emails, calls, and follow-ups have a direct cost your business can't absorb. If you've been chasing a Spanish debtor for more than 60 days without result, every additional hour of internal effort is money wasted on a method that has already failed. That time is better spent on revenue-generating work.

Step 2: Engage a professional on no-win, no-fee terms. Most reputable collection agencies accept commercial cases with no upfront fees. Commission is deducted only from recovered funds — typically 8–15% depending on debt amount and age. For a small business, this eliminates the financial risk of pursuing the debt entirely. You invest time in providing documentation; the agency invests resources in recovery.

Step 3: Amicable collection. The agency contacts your Spanish debtor directly — in Spanish, from Spain, with the credibility of local enforcement capability. For most small business debts where the debtor is still operating, this phase resolves the matter within 30–90 days. The debtor's calculation changes fundamentally when a professional agent based in their country replaces the overseas creditor's increasingly frustrated emails.

Step 4: Legal escalation if necessary. If amicable efforts fail, the monitorio payment order provides a fast-track legal route. Court costs are modest — typically €300–€1,500 depending on the debt amount — and are recoverable from the debtor in successful cases. Most agencies advise that monitorio proceedings are economically viable for debts above €10,000–€15,000.

What Small Businesses Get Wrong

Waiting too long. Small businesses tend to give Spanish debtors more patience than they should — partly because of the relationship, partly because pursuing the debt feels overwhelming. Every month of delay reduces recovery probability. The 90-day rule applies regardless of your company's size.

Assuming it's not worth pursuing. A €30,000 debt recovered at 12% commission nets €26,400. The same debt written off generates a tax deduction of perhaps €6,000–€8,000. Even seemingly small debts justify professional pursuit when the agency carries the financial risk through no-win, no-fee terms.

Trying to use a domestic lawyer. A demand letter from a UK or US law firm has no enforcement mechanism in Spain. It costs money, takes time, and accomplishes nothing that a strongly-worded email didn't already fail to accomplish. That budget is better directed toward a Spanish-based collection professional who can actually apply pressure.

FAQ

I'm a freelancer owed €8,000 by a Spanish company. Is that too small to pursue?

It's at the lower end for professional collection but not necessarily below the threshold. Some agencies accept cases from €5,000. For amounts below their minimum, a formal demand letter from a Spanish attorney (€300–€500) can be a cost-effective standalone measure. It often prompts payment from debtors who've been comfortably ignoring informal requests.

Do I need to travel to Spain for any part of the process?

No. The entire collection process — amicable and legal — can be managed remotely through your agency. They handle all in-country activity including debtor contact, court appearances, and document filing. You provide documentation and authorisation; they handle execution.