Agricultural loan "Jaunbalti", Zeltiņu pag., Alūksnes nov.
This project provides LendSecured investors with an opportunity to finance an agricultural loan secured by a first rank mortgage on the real estate “Jaunbalti”, located in Zeltiņu parish, Alūksnes region. The funding target for this project is € 7 050.00, which will be used in order to repay an existing business loan and obtain additional working capital.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 12%, loan term of 24 months, with monthly manner of interest payments and full repayment of the principal at the end of the loan term.
The collateral consists of 3 land plots with a total area of 37.5 ha consisting both of agricultural and forest land. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 14 100,00 will be registered on the collateral in the Land Register of Latvia.
The current market value of the collateral is estimated at € 57 750 subsequently making loan to collateral value ratio (LTV) - 12%. Even upon a forced sale, estimating that the real estate will be sold for 30% lower than the market value (€ 40 425), 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 € 1 750 EUR per ha to € 2 600 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 cattle breeding. The funds will be used to repay an existing business loan and obtain working capital.
Borrower aims to repay the loan from incoming business revenues (sale of cattle). Furthermore, borrower has other options of loan repayment at his disposal, for example, sale of one of the land plots.