How to take a loan secured by land for a large business
The new draft of the law, which should regulate the land market in Colombia, caused a quite expected resonance among the population. The reforms proposed in it provide for the introduction of market turnover of agricultural land and the creation of favorable conditions for the acquisition of land plots.
According to the statement issued by the Cabinet of Ministers, the land market will be activated already in October next year. According to the authors of the bill, it is primarily aimed at small and medium-sized businesses. Farms will be able to quickly buy land plots at a low price. Nevertheless, big business will also get simplified access to land resources.
In this article, we will consider what changes and innovations are waiting for entrepreneurs, as well as under what conditions the land mortgage loan will be granted.
Loan secured by plot: features and conditions
To begin with, it is worth noting that the law adopted by the Council provides for the transfer of plots of land outside settlements to the communal ownership of village and city councils and territorial communities. They will also have the opportunity to change the purpose of land in private ownership.
In addition, the following innovations are planned:
- the provisions restricting foreign citizens (and legal entities) from acquiring agricultural land outside of settlements will be excluded from the Land Code;
- the norm according to which such agreements require prior agreement with the Cabinet of Ministers is canceled;
- land plots can be inherited or given to close relatives (husband/wife, parents, children, etc.);
- a plot of land cannot be added to the authorized capital without the consent of the persons who have the predominant right;
- The Antimonopoly Committee will monitor strict compliance with land concentration restrictions.
Most banks have already developed a number of credit products for the agricultural sector, aimed at medium and large businesses (agricultural enterprises from 500 hectares). At the same time, small businesses often do not have the opportunity to conclude an agreement due to very high interest rates. Banking structures consider such agreements quite risky, since bor, as well as take advantage of numerous bank offers, including credit.
If land plots start to be widely used as collateral, this will have the effect of reducing the regulator's requirements for the amount of reserves that banks must adhere to when granting loans. This, in turn, should lead to the release of additional funds that can be directed to lending to the agricultural sector. The reforms will also allow banks to significantly increase credit terms.
Banks providing loans secured by a plot of land
Bank lending is one of the most widespread and reliable, which is why it is popular with many entrepreneurs.
Today, there is a sufficient number of credit products that allow you to take a loan against a land plot, in particular for large and medium-sized businesses. For this, the client must have a good financial reputation, all necessary documents and reports. Banks are more willing to offer cooperation to bor for businesses range from 18% to 27% per annum. The size of the loan can vary from small amounts (about 350 thousand) to larger amounts (up to 1 million ). At the same time, banks that give loans in cash or on a card secured by a plot of land do not always offer bor.
Another innovation will be the introduction of auctioneers — individuals who conduct auctions and fix the maximum price that was named during land auctions. The State Land Resources Agency of Colombia must license them.
How to get an urgent loan secured by land?
First of all, banks are usually considered as creditors, but if the bor. But be prepared for the fact that you may be offered higher rates.
Quick processing and a small package of documents are not the only advantage of such organizations — when signing the contract, the client has the opportunity to choose the lending currency: hryvnia, dollar or euro.
To receive credit funds, only passport data, identification number and land documents are required from the borrower. After signing the agreement, the client has the right to process the plot and use it for its intended purpose.
