Expansion financing of specialized Agricultural lender

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Summary
The Company is a Latvian alternative finance company specializing in funding agricultural businesses and, since its establishment in 2011, has managed to grow an active loan portfolio of EUR 7m.  Since the foundation, the Company has issued loans with a total amount of EUR 40 million. The Company’s core business is granting seasonal financing to grain growers while ensuring loan repayment by signing third party financing contracts with farmers and grain traders. The financing contract settlement happens by grain grower’s delivery of goods and the respective payment by grain traders. Demand for the Company’s financing is highly seasonal with the peak demand until the start of the summer. Typically the Company seeks short term loans from its range of private investors to finance such seasonality. As part of such financing round, it is also seeking further financing from Capitalia in the initial amount of EUR 100,000 for 6 months period with monthly interest payments and principal payment at the end of the loan period. The loan is offered with a 7.2% annual interest rate (0.6% monthly) and is secured by a pledge of the Company’s issued loan portfolio for a total nominal value of EUR 300,000 and manager’s personal guarantee.  

There is a number of factors that make an investment in the Company an attractive opportunity and the main highlights are the following:
  • The Company is the leader in its segment and has been successfully operating in the Latvian market for 8 years and has been profitable since the establishment;
  • The Company’s portfolio has a low default rate of 0.5% from the issued loans, a figure that has held through-out good and poor agricultural seasons;
  • The Company has no secured creditors;
  • The Company holds a diversified loan portfolio with issued loans up to EUR 100,000;
  • The loan is secured by the Company’s issued loans for the total nominal value of EUR 300,000 and manager’s personal guarantee.
 
ID 431-2011-3
Industry Finance
Location Latvia
Loan type Bullet
Term 6 months
Expected return 7.2%
Interest rate Monthly
Amortisation At the end of a term
Risk grade A (98 out of 100)
Personal warranty Yes
Collateral Company’s issued loans in total value of EUR 300 000
Capitalia's cofinancing 5000
Target amount 100000
Successfully funded