The Company has been engaged in construction, real estate management, and development for more than 15 years. For the construction services, the only client of the Company is its related entity – a developer of residential apartment houses.  Approximately 90% of the Company's revenue is generated by construction services, with the remaining revenue coming from the management services of apartment houses developed by the related entity.

The Company is set to begin construction of a 10-apartment building in Riga.  The total construction costs are estimated at EUR 1.11 million, while the anticipated sales revenue is estimated at EUR 1.94 million (including VAT). The building permit has been received, and the Company intends to initiate construction as soon as possible.

Capitalia has approved the financing limit of EUR 700,000 for this development project, and the first tranche of EUR 113,300 has already been issued to the client and invested in the property development. The second tranche of EUR 103,000 will be issued once the Land Registry approves mortgage registration.

Therefore, the Company is seeking for the next financing tranche of EUR 103,000  for 24 months to continue with the construction works on the property and settle for construction works. The loan will carry a 11.28% annual interest rate (0.94% monthly) and it will be amortized at the end of the loan term from the sale of the developed apartments. All the financing tranches will be secured with the property under development with an initial market value of EUR 176,000 and an estimated future value of EUR 1.94 million. In addition, the related company and the owner of both companies will provide guarantees. The project risk rate is A (90 out of 100).

The approved limit for the Company is EUR 700,000, which will be issued in monthly tranches. All financing tranches will be secured with one - shared mortgage to the property under development with a future value of EUR 1.94 million. These loans will not exceed 70% of the incurred hard costs (loan-to-costs) and will be disbursed based on construction progress. This progress and loan usage will be carefully supervised and reported by an independent and certified construction supervisor chosen by Capitalia.

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 the real estate under development with the estimated future market value at EUR 1.94 million resulting in the LTV of 37% considering all the financing tranches.
• The related company and the owner of both companies will provide guarantees.
• The Company has more than 15 years of experience in the industry.
• The Company has been profitable and growing revenue for the last 5 years.
• The cost estimation, construction progress, and usage of issued funds will be checked by a certified construction supervisor.