This project provides LendSecured investors with an opportunity to finance an agricultural loan secured by a first rank mortgage on the real estate “Pitrānu mājas”, located in Aulejas parish, Krāslavas region for Aulejas pagasta zemnieku saimniecība “LĪVA”, registration No. 41501009506. The funding target for this project is € 9 200.00, which will be used in order to refinance existing business loans. For this aim, the borrower is also concluding another loan agreement via LendSecured in the amount of € 16 800.00 secured by another real estate.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 52%, 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 10.6 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 € 18 400,00 will be registered on the collateral in the Land Register of Latvia.
The current market value of the collateral is estimated at € 17 800 subsequently making loan to collateral value ratio (LTV) - 52%.
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 € 1 800 per ha. The average price of forest land keep increasing, on average being € 2 140 per ha.
Borrower has been operating since 1993 and is engaged in growing of crops, market gardening, horticulture, farming of animals, agricultural and animal husbandry service activities. This is not Borrower’s first collaboration with LendSecured. In 2018 the Borrower was granted a loan for refinancing purposes, which was repaid in 2020 from the income from logging.
Borrower aims to repay the loan from incoming business revenues. For additional guarantee the owner of the farm is giving a surety-ship in the full loan amount. The borrower is a recipient of support payments from European Agricultural Guarantee Fund and European Agricultural Fund for Rural Development.