Funding for ZS Šķētes

Loan

• Amount €2,400.00
• Interest rate 10%
• Term 11m
• Collateral type Land
• LTV 6%

Description

This project provides LANDE investors with an opportunity to finance an agricultural loan in amount of € 2 400, secured by a first-rank mortgage on a real estate, located in "Šķētes", Liezēres pag., Madonas nov., Latvia.

Borrower, is a farming company, engaged in cattle farming and manages 32.9 ha arable land and will use the loan to for working capital. Financials in 2021: net revenue € 21 423; net profit € 5 295.

Annual interest rate of 10%, LTV of 6%, loan term of 11 months, with a monthly manner of interest payments.

The collateral consists of a land plot with a total area of 14.7 ha agricultural land. In order to secure the claims, arising out of loan agreements a first-hand mortgage will be registered on the collateral in the Land Register of Latvia. Aside from the mortgage, the collateral is debt free. 

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 € 2 700 to € 2 900 per ha. The current market value of the collateral is estimated to be € 41 700 subsequently making the loan to collateral value ratio (LTV) - 6%.

The borrower aims to repay the loan from incoming business revenues.

The borrower is a recipient of support payments from European Agricultural Guarantee Fund and European Agricultural Fund for Rural Development. For additional guarantee the owner of the farm is giving a personal surety in the full loan amount.