FINANCING
Land transaction
Senwes Credit offers clever financial solutions
As a result of the more favourable agricultural conditions over the past two seasons , the inactive land market is reflecting a definite revival , particularly in the higher potential areas .
� By Francois de Kock Senwes Credit : Head Commercial Agri Finance
An important consideration for the producer in the negotiation process when he wants to buy land is whether he will be able to repay the purchase price based on the production ability of the land concerned - whether to the producer in instances where own capital is used , or to a financier .
For this reason , Senwes Credit finances up to 100 % of the productive value of the land and does not merely provide finance based on the generic downscaling of the realistic market value of the land ( e . g . 50 % or 60 % of the valuation ), which is done by many other financiers . The term finance product offered by Senwes Credit is a popular financial solution for producers to finance land transactions . Term loans are structured according to the cash flow situation of the producer in order to facilitate repayment .
A number of characteristics of the Senwes Credit term loan solution relating to land transactions :
� Repayments can be done monthly , quarterly , half-yearly and annually ;
� The repayment of the loan can be done over a maximum term of ten years ;
� A first mortgage bond over land with a productive value which at least equals the amount of the loan , is required as security ;
� Should the purchase price of the land be more than the productive value of the land , an own contribution is required as deposit . Alternatively , consideration can be given to use a first mortgage bond on existing agricultural land , already registered in the name of the client , as additional security for the deposit ;
� Interest rates compete well with the rates offered in the market ;
� Surplus funds can be paid into the account and withdrawn again at a later stage should the client require funds . Interest can be saved in this manner and the loan can be repaid much sooner .
Please contact your manager , agri-finance or Senwes Credit for further enquiries .
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SENWES SCENARIO | SPRING 2018