Best Cold Storage Loan Services

• Purpose of Cold Storage Loan

Cold Storage Loan Services is in fact very useful to agriculturists as well as traders who are running the cold storage business. Adequate cold storage facility is very essential to ensure uninterrupted supply of agricultural commodities to all parts of the country. Similarly, individual businessmen who want to start their own cold storage business can also avail the loan to set up the facility for the first time. Those who want to increase the capacity of their existing cold storage facility also can take advantage of this loan scheme. Farmers and individuals who run cold storage business can have sufficient capital required for smooth running of their cold storage business once they avail cold storage finance offered by NABARD and various other banks in India.

Features of Cold Storage Loan

Those who avail the Cold Storage Loan are required to pledge their asset as collateral security since all the loans under this scheme such as Cold Storage Loan from Nabard, SBI Cold Storage Loan, Canara Bank Cold Storage Loan and Loan for Cold Storage offered by any other bank are all secured loans. The borrower of the Cold Storage Loan can use the amount either to set up a new cold storage unit or for expansion and/or modernization of an existing cold storage facility. Normally, up to 75% of the total estimated cost of the project will be granted as loan under this loan scheme. Cold Storage Loan can be availed by farmers, individuals, group of individuals, co-operative societies and companies that are in cold storage business. Mortgage of land or site of the cold storage will be accepted as collateral.

Boosting the Agri sector

Since agriculture is the back bone of our country’s economy, a lot of people are in agriculture and in various agri-related businesses. The Cold Storage finance provided by many banks in India are of immense help not only to agriculturists but also to many new as well as growing agri-related businesses. Another advantage is that with sufficient number of cold storages across the country, supply and distribution of agricultural commodities in good condition will be ensured.

Eligibility Criteria for Cold Storage Loan

A few eligibility criteria are mentioned under the Cold Storage Loan Scheme for financing of cold storage units. Those who meet these criteria will be eligible to avail the Cold Storage Loan. Individuals as well as group of individuals can avail the loan. Likewise, co-operative societies, registered companies, proprietary concerns and partnership concerns are also eligible. In the case of companies as well as individual/partnership business concerns, the bank concerned will check the reputation of the business promoters. Also, when loan is applied for an existing cold storage, the bank will check whether the facility is in running condition and was running profitably during last 3 years. Equally important, the companies that apply for Cold Storage Loan must be maintaining their accounts strictly as per the rules. For new cold storage project, the promoters are required to submit the feasibility study report to the bank for availing the loan for cold storage.

Interest rates and other charges on Cold Storage Loan

The rate of interest for loans under the Cold Storage Loan scheme will be based on the amount of loan availed as well as its tenure. Interest rate for this loan is also fixed on the CRA. The cold storage loan interest rate may vary depending on the policies of the financial institutions and also the concessions allowed by the Government to the agriculture sector. Normally, the maximum repayment period for this loan is 9 years. However the tenure of loans under the Cold Storage Loan scheme varies from 6 to 9 years. Borrowers can avail loan from Rs. 25 lacs up to Rs. 1 Crore under this loan scheme. The Collateral security for obtaining the loan should cover the full loan amount and moreover, the promoters/partners should execute personal guarantee also. 60% – 75% of the estimated total project cost will be granted as Cold Storage Loan.

How to Apply for a Cold Storage Loan 

Those who want to apply for the Loan for Cold Storage may first visit the nearest branch of the Bank from which they prefer to get the loan for starting Cold Storage business. Next, the applicant can discuss in detail regarding his project as well as his application for Cold Storage Loan. Borrowers can also approach the Marketing Officers who will be regularly visiting the designated areas. The Marketing Officer will assist the applicant throughout the process of applying for the loan under the Cold Storage Loan scheme. The documents that are required to apply for the loan include

– the prescribed application form duly filled and signed by the applicant

– recent photograph of the borrower

– Pledge of warehouse receipts that show stocks of agricultural commodities

– Hypothecation of commodities stored separately with the farmer