Agricultural loan for purchase of foresting equipment
This project provides LendSecured investors with an opportunity to finance an agricultural loan secured by a first rank mortgage on two real estates “Zemeskalni”, located in Ņukšu parish, Ludzas region and “Pļavnieki”, located in Ņukšu parish, Ludzas region for a self-employed forester. The funding target for this project is € 11 800.00, which will be used in order to purchase foresting equipment.
This project gives an opportunity to make a loan with an annual rate of 11%, LTV of 59%, loan term of 12 months, with monthly manner of interest payments and repayment of principal at the end of the loan term.
The collateral consists of 5 agricultural land plots with a total area of 13.3 ha. In order to secure the claims, arising out of loan agreements, a first-hand mortgage in the amount of € 23 600,00 will be registered on the collateral in the Land Register of Latvia.
The current market value of the collateral is estimated at € 19 950 subsequently making loan to collateral value ratio (LTV) - 59%.
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 is self-employed forester and will use the funds to purchase new foresting equipment. The borrower is a recipient of support payments from European Agricultural Guarantee Fund and European Agricultural Fund for Rural Development and aims to repay the loan from incoming business revenues.