Agricultural loan

Description

This project provides LendSecured investors with an opportunity to finance an agricultural loan in the amount of € 3 400 secured by a first rank mortgage on the real estate “Kapusala”, located in Vectilza, Vectilzas parish, Balvu region.

This project gives an opportunity to make a loan with an annual rate of 12%, LTV of 26%, loan term of 12 months, with monthly manner of interest and principal payments.

The collateral consists of 3 agricultural land plots with a total area of 9.46 ha and 9 buildings on the respective land. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 6 800 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 is estimated at € 13 070 subsequently making loan to collateral value ratio (LTV) - 26%.  Even upon a forced sale, estimating that the real estate will be sold for 30% lower than the market value (€ 9 149), LTV will not exceed 50%.

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 ranges from € 1 300 EUR per ha to € 1 700 per ha.

The Borrower is an owner of a farm undertaking, which under the Latvian legislation is not registered in the commercial register. The Borrower is engaged in livestock production and will use the funds to purchase the feed and for the repair of the farm building.

Borrower aims to repay the loan from incoming business revenues or from the sale of one of the land plots.