This project provides LendSecured investors with an opportunity to finance an agricultural loan in the amount of € 10 000 secured by a first rank mortgage on the real estate “Silkani”, located in Smārdes parish, Engures region.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 29%, loan term of 12 months, with monthly manner of interest and principal payments.
The collateral consists of a land plot with a total area of 10.42 ha, which consists of agricultural (6.9 ha) and forest land (3.4 ha). In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 20 000 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 is estimated at € 34 870 subsequently making loan to collateral value ratio (LTV) - 29%. Even upon a forced sale, estimating that the real estate will be sold for 30% lower than the market value (€ 24 409), 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 € 4 000 EUR per ha to € 5 800 per ha. The average price of forest land keep increasing, on average being € 2 140 per ha.
The Borrower is self-employed in agricultural sector and is engaged in growing of vegetables. The funds will be used to in order to prepare for the new season – repair the machinery, buy fertilizers and seeds.
Borrower aims to repay the loan from incoming business revenues or from logging.