If you want to start investing in Agricultural loans and Green loans and make average returns 13% p.a. you definitely have to explore investment opportunities offered by the crowdfunding platform from HeavyFinance!

Today we will have an interview with Andrius Liukaitis, co-founder and Head of Lending at HeavyFinance and learn more about how HeavyFinance helps people make money by investing in agriculture. 

Andrius thank you for joining today, please tell us how HeavyFinance works and what investment opportunities the platform offers.

At HeavyFinance, we assist small and medium-sized farmers on their journey towards more sustainable agriculture and the production of more nutritious food. We have three products based on their readiness to implement and scale sustainable agricultural practices like minimum soil disturbance, crop rotation, cover crops, improved residue management, and decreased use of pesticides, nitrogen, and other chemical fertilizers. All these products include consultations with our agronomy team, meaning that when providing them loans, we offer smart finance that comes with additional benefits. 

Our highest impact and most innovative financial instrument is a Green Loan (learn more about Green loans). It allows retail investors to get exposure to the rapidly growing Voluntary Carbon Market, where global corporations like Microsoft, Google, Salesforce, and others buy carbon credits generated on farms to abate their carbon footprint. Farmers need to make additional investments to move to more sustainable farming and generate carbon credits making environmental difference and that’s where retail investors step in. By investing in a Green Loan, you put your capital at the very beginning of the value chain gaining the opportunity to earn high double-digit returns. Investors in some green loans are expected to earn even higher than 25% annualised returns because of the number of carbon credits generated on the farm and increasing price per nature-based agricultural carbon credit. 

Considering main investment parameters, Green Loan is a collateralized debt instrument with a hint of equity investment. Farmers receive a loan with up to 90% loan-to-value (LTV) ratio on land and up to 70% LT on heavy equipment; they need to repay the loan according to a tailored schedule over a term varying from 12 to 48 months. While this is standard to the lending industry, the return part is where things get slightly different. Investors are getting returns for the whole loan period plus one year after. Also, returns are paid in tranches every 2-3 years after loan issuance, giving farmers time to make needed changes to start generating carbon credits. It also gives us time to measure and verify with international organizations CO2 emissions removed due to a change made on farms. The more carbon credits a farm generates, the higher are investors' returns. 

As investors get returns from the sale of carbon credits, farmers get loans for 0% interest rate. This type of financing puts them in a much better financial position ensuring smoother principal amount repayments to investors. We generally see a clear pattern that farmers receiving a Green Loan are much less likely to be late on their repayments.

No doubt HeavyFinance receives hundreds of loan applications but selects only a few best of them, so could you please guide us through the selection process?

The first step is financial analysis to determine the risk level and maximum amount the farm can borrow. We require clients to provide financial documents like balance sheet, profit and loss statement or tax declaration together with farm certificate, crop declaration, filled reputation questionnaire. We also gather data from various registries to have a full understanding of the farm and determine a risk rating from A+ to C. 

Our risk assessment very much focuses on farms' likelihood to be late on their commitments, therefore, collateral does not play a major role in assigning a risk rating. We only accept first rank mortgages on collateral and have many successful recoveries executing our rights to a wide variety of assets pledged as collateral starting with agricultural land and going to motorised heavy equipment like tractors and combine harvesters to instalments like no-till seeders, trailers, grain elevators, etc. Importantly, all farmers are responsible for their financial obligations like natural persons. Therefore, in case of a farm's bankruptcy, the owner stays personally responsible for debt. 

In grain farms, our ideal client has 30-500 hectares of arable land who aims to begin or to scale sustainable agriculture practices. 

How HeavyFinance is performing collateral evaluation?

HeavyFinance recognises the importance of securing loans with valuable assets that can provide investors with added protection in the event of borrower default. By collateralising all loans exceeding €15,000 with arable land and/or heavy equipment, HeavyFinance is able to offer investors a higher level of security while also mitigating the risk associated with lending to farmers.

An independent valuator evaluates the collateral before loan granting, with maximum loan amounts set at 90% for land and 70% for heavy machinery. In some cases, when land is used as collateral, HeavyFinance can evaluate the land using data from the registry center instead of requiring an independent valuator. These measures not only protect investors, but also provide borrowers with reasonable loan terms that reflect the value of their collateral.

How do you make sure that investors provided money is spent on the intended purpose and is well spent?

When issuing loans to purchase equipment or land, we transfer funds directly to the seller. In cases of working capital, we do not have requirements for proof of funds allocation. However, we do randomly select farms to visit and observe the impact of the loan received. We conduct these visits to also observe how sustainable farming practices are implemented and to provide some agronomy assistance. 

How do you protect collateral value during the landing period?

We accept only first rank mortgages for any type of assets. For agricultural land, this measure is complete enough and with heavy equipment of up to 20 years old we require comprehensive insurance with HeavyFinance as beneficiary acting on behalf of our investor community. After signing a mortgage agreement at the notary office, the asset becomes visible on the mortgage registry preventing it from being sold without our permission.

How do you monitor project progress to make sure that the loan will be repaid on time?

First of all, the vast majority of our clients pay monthly instalments allowing us to react quickly in case the farm enters financial struggles to make a timely repayment.  We also require farmers to provide the most updated financial reports throughout the loan period to reassess the financial shape of the farm. 

Considering sustainability monitoring, there is a very precise methodology VM0042  provided by international verification agency Verra that we follow to inspect and verify removed CO2 emissions. It includes satellite data, public registries, on site visits and laboratory soil samples. 

If the worst thing happens and the borrower defaults how will you support investors?    

HeavyFinance has a very clear loan recovery framework and processes that are handled by our internal team and outsourced lawyers in some specific cases. We start sending reminders 3 days prior to any instalment and continue sending emails, SMS and making calls before taking legal action. 

If the farmer struggles to make a timely repayment, we also analyse if loan restructuring or refinancing at another financial institution is possible and begin the recovery process as a last resort. Normally, we terminate the loan agreement and submit documents to court after the client reaches 60 days of being late on their commitment.  

Recently around Europe we witnessed farmers' protests could you please tell us more about the reasons and potential impact?

Regarding the recent farmer protests, we have to keep in mind that there are a multitude of different reasons behind them. The circumstances in each country are different. Although some issues stretch across the European Union, we see clear distinctions between regions. 

Demonstrations in Poland have focused on what farmers say is unfair competition from large amounts of imports from Ukraine. Centre stage are new EU subsidy rules, such as a requirement to leave 4% of farmland fallow, which means not using it for a period of time. In Spain and France farmers complain about bureaucracy. In Greece they demand higher subsidies. In Germany and France, the EU's biggest agricultural producers, farmers have railed against plans to end subsidies or tax breaks on agricultural diesel.

Having spoken to many farmers directly, it’s clear that they are not against sustainable agriculture. They are at the forefront of climate change. It is their crops that are being destroyed by floods and drought. But tackling the problem depends on governments having constructive conversations with the agricultural community.

Farmers face many challenges and increase access to external financing is one of the solutions helping them to grow and modernise. 

Could you please tell us more about the HeavyFinance team's key players? 

Laimonas Noreika is the CEO of HeavyFinance. Before leading the company, he served as the CEO of the Lithuanian P2P platform FinBee for over four years, where he gained extensive experience in the fintech industry and strategic planning for P2P platforms. I am Andrius Liukaitis, the Head of Lending at HeavyFinance. Prior to joining the team, I worked as the CFO at NEO Finance for five years. In my current role, I am responsible for overseeing all lending operations at HeavyFinance. Darius Verseckas, our third co-founder, serves as the CMO, managing marketing efforts and external communications for the platform.

A key player in our risk management team, besides the owners, is Aldona Micė, the Head of Risk and Recovery. With over a decade of experience in debt collection and credit management within the agricultural sector, Aldona leads our recovery team. She is responsible for managing both pre-trial and legal proceedings to ensure effective debt recovery while maintaining communication with borrowers. Her expertise is crucial for mitigating risks and tailoring recovery processes for the agricultural sector, which helps ensure financial stability and protect our investors.

Please tell us about HeavyFinance future development plans. 

Please describe new markets you planning to enter, new products, and new features. 

In 2025, we anticipate significantly accelerated growth, driven by the addition of two new institutional investors joining the HeavyFinance community. This development will create exciting opportunities for retail investors, as institutional capital will help reduce cash drag and enable us to list larger, more impactful projects.

Importantly, next year many investors will get their first returns from the sale of carbon credits. It will spark the excitement among more conservative investors who were not among the first couple of thousands of early investors in this instrument.

Geographically, HeavyFinance has made significant strides over the past four years. Looking ahead, we see tremendous potential for further expansion in key markets such as Poland—with its 1 million registered farmers—Portugal, Lithuania, Latvia, and Bulgaria. These regions hold great promise for sustainable growth and impactful investment opportunities.

Andrius, thank you very much for joining and answering all the questions, I believe after reading this HeavyFinance existing and new inventors feel safer and more keen to invest.

Dear investors, I hope you now understand better how HeavyFinance works and how it helps you protect your investments, but remember when investing there are always risks of losing all funds thus you should always conduct your own analysis. 

Reminder: Direct and indirect crowdfunding investments carry significant risks, including the potential loss of all invested capital.

If you want to start investing in HeavyFinance register via this link and receive a 2% cashback on invested amount for the first 30 days.

Have a good day and we wish you successful investing!