Englewood-based direct private lender Kennedy Funding and Innovaciones y Ecologia Aplicada S.A.C. on Thursday said they closed a $3.71 million land loan in Piura, a city in northwestern Peru.
The loan will be used to pay debt off and for working capital for agricultural and commercial mixed-use applications across two lots.
It’s notoriously difficult to find a lender that’s willing or able to close land loans in South America. That’s why Innovaciones y Ecologia Aplicada S.A.C. sought out Kennedy Funding to secure a land loan for its “Fundo El Progreso” project.
“To secure land loans in Peru and other countries outside the U.S., you need to team up with a direct private lender that’s well-versed in the locale’s real estate markets, political landscapes and laws,” Kennedy Funding CEO and President Kevin Wolfer said. “These private lenders are the only people with enough expertise to remain compliant with the complex local regulations and paperwork that are part and parcel of real estate, land use, environmental and title.”
Innovaciones y Ecologia Aplicada S.A.C. initially purchased the land in 2012. To date, the borrower has invested substantially on infrastructure, installing electric, water, irrigation and roads across all 15,000 acres of the property. The two new lots purchased via the Kennedy Funding deal cover, respectively, 1,631.78 hectares and 1,226.70 hectares of agricultural land. Both lots are zoned for industrial, residential or agricultural use.
Wolfer said that funding deals often become more challenging when raw land is involved, as most lenders automatically view land as high-risk.
“Thoroughly, accurately appraising land in other countries is extremely difficult, but crucial for a successful international loan closing,” Wolfer added. “We work with world-renowned firms — independent experts for accurate property appraisals — so we can provide our borrowers with the largest possible loans.”
Piura is a city of approximately 325,000 people, making it Peru’s eighth-largest city. It’s situated along the Piura River within the Sechura Desert. One-third of the population works in agriculture, making the borrower’s project a welcome addition to the city.
“This property will be used for agricultural and mixed-used purposes in an area home to a large population of agricultural workers,” Wolfer said. “We immediately saw why the property is so valuable, and why the deal would be highly beneficial.”
This newest loan closing follows two previous Kennedy Funding transactions in Peru: a $2.5 million land loan to be used in a mountainous, inland Peruvian city, and a $3.65 million land loan for a real estate development in Lima, the capital and Peru’s largest city.
Kennedy Funding has developed a reputation internationally for closing loans that other U.S. lenders won’t even consider. The firm has closed dozens of loans in other South American countries, including Colombia and Brazil, and throughout the Caribbean, Canada and Europe. Among the countries where Kennedy Funding has successfully closed loans: Jamaica, Dominican Republic, St. Maarten, the Bahamas, Belize and St. Barts, among many other international destinations.
“We are proud that we have closed our third loan in Peru,” said Wolfer. “We get loan requests all across South America, and we are one of only a few lenders that are willing and able to close them. We will always continue to serve this ever-growing market.”
