Cold Storage Loan

Cold storage loans are a type of business loan that is used to finance the construction or renovation of a cold storage facility. Cold storage facilities are used to store perishable goods, such as food, pharmaceuticals, and flowers. The loans are typically secured by the cold storage facility itself.

The interest rates on cold storage loans vary depending on the lender, the borrower's credit score, and the terms of the loan. The repayment terms for cold storage loans typically range from 5 to 10 years.

To qualify for a cold storage loan, the borrower must have a good credit score and a strong business plan. The borrower must also be able to provide collateral, such as the cold storage facility itself.

Cold storage loans can be a great way to finance the construction or renovation of a cold storage facility. Please note, it is important to compare interest rates and terms from multiple lenders before applying for a loan.

Interest Rates for Cold Storage Loan

Interest rates for cold storage loans can vary due to several different factors, including the lender, loan amount, repayment term, collateral, creditworthiness, and prevailing market conditions. A general interest rate can help you understand what to expect while looking for a cold storage loan.

The table below mentions the general interest rates to help you plan your loan effectively.

Eligibility Criteria For Cold Storage Loan

Securing a cold storage loan hinges on meeting specific eligibility criteria, which can vary slightly depending on the lender and chosen loan type. Here's a breakdown of the key factors often considered:

General Criteria:

• Business type: Registered entities like proprietorships, partnerships, limited companies, and cooperatives are typically eligible.
• Business experience: Established businesses with a proven track record and financial stability are preferred.
• Project viability: A well-defined business plan for the cold storage facility is crucial, demonstrating its feasibility and profitability.
• Credit score: Maintaining a good credit score significantly improves your chances of approval.

Additional Criteria (may vary depending on lender and loan type):

• Industry and location: Some lenders focus on specific industries or prioritise projects in certain areas.
• Collateral: Providing collateral like land or the cold storage facility itself can improve your eligibility and secure lower interest rates.
• Government schemes: Specific schemes like NABARD's RIDF have additional eligibility criteria based on project type and location.
• Personal guarantees: For smaller businesses or higher loan amounts, personal guarantees from directors or owners may be required.
• Financial Standing: Financial statements reflecting profitability and a healthy debt-to-income ratio are crucial.Tax returns demonstrating financial stability may be required.

EMI Calculator For Cold Storage Loan

An EMI (Equated Monthly Instalment) calculator is an invaluable tool for individuals or businesses considering a cold storage loan. It allows borrowers to estimate their monthly repayment amounts based on the loan amount, interest rate, and tenure. By inputting these variables, users can make informed decisions regarding loan affordability and plan their finances effectively.

The EMI calculator simplifies the complex calculations associated with cold storage loans, providing a clear understanding of the financial commitment involved in the borrowing process.

You can use the Buddy Loan EMI calculator to simplify your process:

Documents Required For Cold Storage Loan

The documents required for your cold storage loan application can vary depending on the chosen lender, loan type, and government schemes involved. However, here's a comprehensive list of commonly requested documents to prepare:

• Business registration documents: Incorporation certificate, partnership deed, MOA & AOA for companies, etc.
• Financial statements: Latest audited profit & loss statements, balance sheets, and Income Tax returns for the past 3 years.
• Project proposal and business plan: A detailed plan outlining the cold storage project, including estimated costs, revenue projections, and market analysis.
• Income proof: Bank statements, salary slips, or other documents demonstrating income sources.
• Identity and address proof: PAN card, Aadhaar card, voter ID, driving licence, passport, etc., for directors/owners and authorised signatories.
• Property documents: Land ownership documents, lease agreements, or proof of property where the cold storage will be constructed.
• Collateral documents: Ownership documents for land, buildings, equipment, or other assets offered as collateral.
• Project feasibility study: A detailed report analysing the project's technical, financial, and environmental viability.
• Market research reports: Supporting data on market demand, competition, and pricing trends for stored products.

Government Schemes Offering Cold Storage Loan

Several government schemes in India offer attractive cold storage loan options, promoting agricultural development and minimising post-harvest losses. Here are some key schemes that provide loans for cold storage:

NABARD's Rural Infrastructure Development Fund (RIDF):

• Focus: Construction and modernization of cold storage facilities, primarily in rural areas.
• Loan amount: Up to Rs. 40 crore.
• Interest rates: Subsidised rates ranging from 5% to 8%.
• Eligibility: Farmer Producer Organizations (FPOs), cooperatives, agri-entrepreneurs, and other entities engaged in cold chain infrastructure development.

Pradhan Mantri Kisan Sampada Yojana (PMKSY):

• Focus: Cold chain infrastructure development across the entire value chain, including pre-cooling units, storage facilities, and transportation.
• Loan amount: Up to Rs. 50 crore.
• Interest rates: Subsidised rates ranging from 5% to 8%.
• Eligibility: Wide range of entities, including FPOs, cooperatives, private companies, and individual entrepreneurs.

Kisan Credit Card (KCC):

• Focus: Working capital needs for operating cold storage facilities, including purchase of equipment and inventory management.
• Loan amount: Up to Rs. 2 lakh.
• Interest rates: Negotiable with banks, often lower than conventional loans.
• Eligibility: Farmers and FPOs involved in storing agricultural produce.

Business Loan Lenders for Cold Storage

Choosing the right cold storage loan provider is crucial for businesses. This comparison involves assessing factors like interest rates, eligibility criteria, and additional services offered by different lenders.
By making informed decisions, businesses can secure the most suitable financing for their cold storage needs.

Tips For a Successful Cold Storage Loan Application

Securing a cold storage loan involves strategic planning and adherence to specific considerations unique to this industry. Here are key tips for a successful cold storage loan application:

• Comprehensive Business Plan: Develop a detailed business plan outlining the purpose of the cold storage facility, operational strategies, and financial projections.
• Financial Stability: Demonstrate the financial stability of your business through clear and accurate financial statements, showcasing profitability and sound financial management.
• Creditworthiness: Maintain a good credit score to enhance your eligibility and thus you can increase your credibility for negotiating favourable terms with the lenders.
• Collateral Readiness: Be prepared to offer collateral, such as the cold storage facility or other assets, to secure the loan.
• Industry Experience: Highlight your experience in the cold storage or related industry to instil confidence in lenders regarding your ability to manage the facility.
• Thorough Research: Explore multiple lenders to compare interest rates, terms, and additional fees, choosing the one that best suits your financial needs.
• Transparent Communication: Maintain transparent and open communication with the lender, addressing any queries promptly and providing additional information as needed.

Steps to Apply Online for Cold Storage Loan

Step 1: Pick a lender: Compare rates, fees, and schemes offered by cold storage loan providers like PNB, NABARD, or online platforms.

Step 2: Prep your docs: Gather business registration, financials, plan, ID proof, and land docs (if applicable).

Step 3: Apply online: Fill out the lender's online form and upload your documents securely.

Step 4: Get verified: Expect calls or site visits for further info and credit checks.

Step 5: Receive decision: Lender evaluates your project and financial standing.

Step 6: Sign and receive: If approved, review and sign agreements to get the loan disbursed.

Quick Steps to Apply for a Business Loan

You can avail a business loan upto 50 lakhs as per your needs with Buddy Loan which provides you with a pool of verified lenders.

With Buddy Loan, you can avail business loans at attractive rates through an easy process:

• Step 1: Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).
• Step 2: Open the business loan application page. Enter your mobile number and OTP.
• Step 3: Specify the desired loan amount and email. Next, choose the Business Loan option.
• Step 4: Choose if you have a Business Proof (Yes/ No)
• If ‘Yes’ (If you have a business proof), enter your business and personal details.
  Or
• If ‘No’ (If you do not have a business proof), choose the profession type and enter your personal details.
• Step 5: Provide income details and Click the ‘Submit’ button.