This project provides LendSecured investors with an opportunity to finance an agricultural loan, secured by a first rank mortgage on the real estate “Limbas”, located in Zasas parish, Jekabpils region. The funding target for this project is € 52 000, which will be used for cattle purchase and in order to provide working capital.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 52%, loan term of 24 months, with monthly manner of interest payments.
The collateral consists of a land plot of 40 ha, from which 33.6 ha is agricultural land and 4.9 ha - forests. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 104 000 will be 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 € 100 000 subsequently making loan to collateral value ratio (LTV) - 52%. The value of real estate upon a forced sale is estimated at € 80 000 (LTV 65%).
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 Birze1 LLC, registered in the Latvian commercial register with No. 45403046263. The borrower is engaged in mixed farming and is taking an opportunity of the cattle price drop due to Covid19, in order to expand the herd and develop. The Borrower has closed 2019 with profit of € 35 000. Additionally, Borrower receives state aid payments for areas with significant natural constraints and payments for climate and environment friendly agricultural practices.
The pledger is Kristaps Rāviņš, a family member of the sole member of the board and the beneficial owner of the company. To provide additional guarantee both the pledger and member of the board give personal suretyship in the full loan amount.
Borrower aims to repay the loan from incoming business revenues or by refinancing the loan.