This project provides LendSecured investors with an opportunity to finance an agricultural loan, which is secured by the mortgage of a land plot. The funding target for this project is € 15 430.78, in order to refinance an existing loan and reduce the interest rate.
This investment opportunity offers LendSecured investors to make a loan with an annual rate of 13%, LTV of 21%, loan term of 24 months, with monthly manner of interest and principal payments.
The collateral consists of a land plot of 30.4 ha and a complex of 5 buildings upon it. The land plot consists of 17.2 ha of agricultural land and 11.5 ha of forests. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 30 861.56 have already been registered on the collateral in the Land Register of Latvia. Aside from the mortgage, the collateral is debt free.
The current market value of the collateral estimated by a certified appraiser is € 74 000 subsequently making loan to collateral value ratio (LTV) - 21%. The estimated value upon a forced sale is estimated € 52 000 (LTV 30%).
The demand for agricultural land currently in Latvia exceeds supply and 25% of farmers are forced to rent the land, as there is none available on the market.
The Borrower is an owner of a farm undertaking, which under the Latvian legislation does not constitute as a merchant and is not registered in the commercial register. Borrower obtained the initial loan, which is now to be refinanced, in 2017, for business development. The Borrower cultivates the agricultural land and grows barley for sale. Additionally, Borrower receives state aid payments for forests, compensation payments for areas with significant natural constraints and payments for climate and environment friendly agricultural practices.
Borrower aims to repay the loan from incoming business revenues, sale of forests or refinancing the loan.