From 3 March 2014 it is possible to turn to Nordic Hypo for loans against the security of agricultural land and forest. The product is mainly designed for farmers and landowners who require additional current capital or a loan for the purchase of machines or materials. Often referred to as a bullet loan, it allows for greater flexibility in regulating the amount and time or repayment. Flexible repayment schedules also provide customers with an opportunity to adjust their repayments on a seasonal basis, depending on current income.
The base lending rate for the loan is 16% per annum; the available period of the loan is from 2 months to 5 years. Farmland or forest may serve as security for the loan, and the land should not be registered in the single area payment register of PRIA (Estonian Agricultural Registers and Information Board). “Considering increasing land prices in the last 5 years, which according to the statistics of the Land Board have reached 30% per year in Estonia, additional capital necessary for business can be obtained through a tailored loan service – rather than by selling the land,” says Heikki Rannik, member of the management board and CEO of Nordic Hypo, explaining the new product.