This project provides LendSecured investors with an opportunity to finance an agricultural loan in the amount of € 3 680 secured by a first rank mortgage on the real estate “Jaunlauci”, located in Pusmucovas parish, Ciblas region.
This project gives an opportunity to make a loan with an annual rate of 12%, LTV of 9%, loan term of 10 months, with monthly manner of interest payments.
The collateral consists of 3 agricultural and forest land plots with a total area of 30.5 ha. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 7 360 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 € 39 970 subsequently making loan to collateral value ratio (LTV) - 9%. Even upon a forced sale, estimating that the real estate will be sold for 30% lower than the market value (€ 27 979), LTV will not exceed 15%.
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 region of the collateral ranges from € 1 300 EUR per ha to € 1 700 per ha, while the price of forest land ranges from € 600 EUR per ha to € 900 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 crop production and will use the funds to repair the machinery for the season.
Borrower aims to repay the loan from incoming business revenues or from the sale of one of the land plots.