Secured financing for a reputable real estate management company (II)

Summary
The Company was founded in 2009 and is engaged in the real estate management business. The Company owns an exclusive residential property in Berģi, a residential private house area on the border with Riga. Besides, the Company has 3 daughter companies that each hold an apartment building in Riga (two of them in the old town). Currently, one of the shareholders of the Company is in the process of selling a developed land plot with a total area of 33,5ha. The proceeds of this sale were planned to be used to cover the operating costs of the Company and to repay the Estateguru loan. However, although there is a buyer for the property the sales process can take further several months and the current Estateguru loan expires on the 31st of March 2021. Until the conclusion of the sale of this asset, the Company is seeking financing of EUR 153,510 for 12 months to repay the Estateguru loan and to have a reserve for operating costs. Ledners are offered 13.20% annual (1.10% monthly) interest with the principal repayment at the end of the term from the sale of property proceeds of the shareholder.

The loan is secured with the mortgage pledge to another 5.5ha land property with a market value of EUR 200,000 (valued by Latio on the 10th of February 2021). In addition to the mortgage pledge, personal guarantees of both shareholders are provided. The Company is a repeat client of Capitalia and has repaid a EUR 100,000 loan with an excellent payment discipline.

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 mortgage pledge to the land property with a market value of EUR 200,000 and an LTV of 77%.
  • In addition to the pledge, personal guarantees of both shareholders are provided.
  • The Company is a repeat client of Capitalia having repaid EUR 100,000 loan with an excellent payment discipline.
  • The Company has a significant equity capital of EUR 1.6 million.
  • Clear repayment route of the loan based on the sale of the property to an already found buyer.
ID 11536-3-LV
Industry Real estate
Location Latvia
Loan type Business loan
Term 12 months
Expected return 13.20%
Interest rate Monthly
Amortisation At the end of the term
Risk grade B (80 out of 100)
Personal warranty Yes, from both
owners
Collateral Mortgage on the land
property with the
market value of EUR
200,000
Capitalia's cofinancing 8510
Target amount 153510
Successfully funded