Project Finance for a Construction of Cold Storage Facility.

Project Finance for a Construction of Cold Storage Facility.

Project Finance for a Construction of Cold Storage Facility.

Published Jul 29 

Post preservation of Agricultural products is highly paramount in all farming aspects. This are mostly reasons why Agriculturist should engage into finance for large construction of cold storage plants just to ensure that their produce remain preserved prior to sell and exportation.

The means by which fruits and vegetables and other farm produces are preserved for a longer duration is known as Cold Storage Facility. This business is majorly opted by business owners or MSMEs related to the food and beverage industry. Project Finance for Cold storage is a one-time business investment wherein the initial investment required is on higher side. However, the returns are higher and are on long-term basis, as compared to other small businesses

Havelet Finance Limited offers a worldwide Project finance for the construction of cold storage facilities. The scheme will help farmers and government to construct a large cold storage plant assist farmers against paying much cost on lease/rent of facilities to keep their produce preserved.

Acceptable yardstick for Cold Storage Business

Starting a cold storage business can be capital intensive and a lot of energy is required when planning for the implementation of cold storage business. Below are the acceptable yardstick to secure financing for cold storage facility.

1} A comprehensive project/business plan.

2} A good credit score. But to some extent, Havelet Finance Limited offers loans for implementation of cold storage business without digging into the borrowers credit scores. The security we need to fund such business is the owners promissory for loan repayment.

3} Business annual turnover, tenure, experience, profitability shall be checked and defined by the lender.

Interest rates and other charges for financing a cold Storage business

Interest rates and other charges for financing a cold storage business varies. Unlike bank loans, some private financial institution charge as little as 3% interest rate. Havelet Finance Limited charges a flexible rate of 2% interest rate annually for the duration of 10-15 years. Most time, closing cost may happen but there is no hiding charges are required to complete funding for the project .

Loan for Cold Storage Business and Application Methods.

Starting a Cold Storage business requires a lot of cash and it is important you Check and compare from all the business loan options offered by banks a leading financial institutions, and then find out the option that suits your business requirements and the follow up with application process.

Upon completion of the application and submission of the necessary details, you are likely to be contacted same day by the representative of the bank or financial company in order to verify the documents to proceed with loan formalities.

Following verifications of your documents etc, you may receive approval letter for and funds may be disburse within 48 hours.

Project Finance cost for Cold Storage Business

Project Finance cost to manage cash flow for cold storage business runs in millions of dollars. Project owners can seek for project finance or loans for a working capital to meet the working capital needs for their business.

Up to 50% of the total cost and machinery is financed by the Ministry of Food Processing industries, as well as North eastern states are eligible to get 75% of the government grants. The eligibility criteria shall be defined by the ministry or the bank sanctioning loan or subsidy.

Important requirements for starting up a Cold Storage Business

  • Cold storage room dimensions 14 ft. x 10 ft. x 10 ft.
  • Storage Space Humidity: 85-90%
  • Storage Materials: Fruits and Vegetables
  • Storage Unit’s Capacity: 10 Metric Tonne (MT)
  • Initial Temperature to produce: 28-35 degrees Celsius
  • Insulation material: 60mm Poly Urethane Fibre (PUF)
  • Refrigeration Capacity: 30000 Btu/hour
  • Assumed outer temperature: 43 degree Celsius
  • Temperature requirement: (+-)2-4 degree Celsius

Project Finance for Cold Storage Business.

Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually, a project financing structure involves a number of equity investors, known as ‘sponsors’, and a ‘syndicate’ of banks or other lending institutions that provide loans to the operation. They are most commonly non-recourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported by financial modeling

Progression of a cold storage business relies on the effective implementation and of marketing strategies alongside promotional and advertising campaigns. In the initial, as well as the later stages of business, an entrepreneur should target various market segments, including traders, wholesalers, marketers, promoters, retail markets, and warehouse companies, supermarkets in rural and urban areas. For further increase in sales and profit, business owners can approach retailers, business growers, producers, distributors, exporters, etc.

Project Finance for a cold storage business can be relatively difficult. The business required a large sum of funds and substantial capital investment. Managing total investment for business from the hard-earned savings is not a viable option, neither is it recommended as savings are used to meet urgent financial requirements or cash crunch situations.

Entrepreneurs who want to start a cold storage business can opt for business loans offered by various financial institutions. They can check and compare from numerous loan deals available in the financial market and choose the best loan deal that suits their business requirements.

Initial Cost for starting up a Cold storage Facility

  • Buying cooling machinery
  • Acquiring land and construction for the storage facility
  • Obtaining licenses from Government or respective authority
  • Managing utilities like water, electricity, and other related materials
  • Hiring and paying salaries to experience, skilled & professional staff
  • Working capital expenses (daily expenditure)
  • Promotional, marketing & advertising expenses

Havelet Finance Limited provides provide funding through our High Net worth Angel investors to both startups and existing businesses. Our funding includes business expansion or to accelerate company growth and alongside working capital loans. We are also currently structuring a convertible debt and loan financing and other project financing and international loans at of 2% interest repayable annually with no early prepayment penalties. Contact us for funding a large constructions of cold storage facility.



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