How is the risk of agricultural projects assessed?
Every farmer is evaluated based on his or her experience in the sector and the historical results of the farm. HeavyFinance requires project owners to provide financial information regarding the results of previous years and their present financial situation. This information is sustained by official documents as Company activity information or business registration, Tax returns, PnL, etc. As well as collateral to cover the required loan-to-value ratio.
The risk modeling consists of various inputs, such as income, liabilities, debt history, net revenue, equity, assets, LTV, and the change in certain ratios throughout the time.
The LTV is a minor input, in the sense that the risk model predicts the borrower’s ability to repay the loan without the liquidation of the assets pledged.