The Company, established in 2020, is an affiliate of a larger real estate developer in the Liepāja region. The group specializes in acquisitions of unfinished or poorly managed apartment buildings, renovates them, and sells refurbished apartments.

In October 2023, the Company acquired a building in Liepāja consisting of two apartments and a mansard floor. Both apartments in the house required renovation to sell them further to end customers. One apartment was pre-sold immediately, and to renovate the second apartment, Capitalia has granted a loan of EUR 61,730 maturing in December 2024.

Now, the second apartment is completely refurbished and ready to be sold; however, the sale of it may take several more months. Since the apartment’s value has notably improved and reached EUR 152,000, the Company prefers receiving additional funds for working capital purposes.

Therefore, the Company is seeking EUR 105,550 financing for 14 months to refinance the previous Capitalia loan maturing in December 2024 and to have more time to sell the newly-refurbished apartment. Also, a part of the loan will be used for working capital purposes to speed up other ongoing renovation and development projects of the group. The loan will carry a 11.16% annual interest rate (0.93% monthly) and it will be amortized at the end of the term from the sale of the pledged apartment.

There are a number of factors that make lending to the Company an attractive opportunity and the main highlights are as follows:

• The loan is secured with a mortgage to a recently refurbished apartment worth EUR 152,000 (LTV 70%).
•  The guarantor company has been profitable since its establishment.
•  The related company with equity of EUR 708,000 and the owner of both companies will provide guarantees.
• The loan repayment is based on a clear repayment source  -the sale of the pledged apartment.
• Both group companies are repeat customers of Capitalia and have repaid almost EUR 400,000 of loan principal.