This project provides LendSecured investors with an opportunity to finance an agricultural loan in the amount of € 6 200 secured by a first rank mortgage on the real estate “Bites”, located in Skaunes parish, Dagdas region.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 40%, loan term of 12 months, with monthly manner of interest and principal payments.
The collateral consists of 3 land plots in the total area of 16.94 ha, from which 11.94 ha is a forest land and 5 ha – agricultural land. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 12 400 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 € 15 500 subsequently making loan to collateral value ratio (LTV) - 40%. The value of real estate upon a forced sale is estimated at € 11 000 (LTV 56%). The forest stand on the real estate is not part of the evaluation, thus the value of the real estate can be predicted even higher.
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 price of agricultural land plots in the parish of the collateral with an area of up to 20 ha ranges from € 1 300 EUR per ha to € 1 800 per ha, while forest land prices range from € 700 to € 800 per ha.
The borrower is self-employed in agricultural sector since 2006. The received funds will be used in order to expand the business and purchase animals, and for operational capital. The borrower is also the owner of the pledged real estate.
Borrower aims to repay the loan from incoming business revenues or from the sale of forest stand.