Steps to start Cold Storage Business

Factors to consider while checking eligibility to get Cold Storage Loan:

The interest rates and charges shall vary from bank to bank and will depend on the applicant’s profile and the financial health of the business.

Follow the below steps to apply loan to start your own cold storage business in India:

Step 1: Check and compare all the business loan options offered by leading financial institutions.

Step 2: Pick the deal that suits your business requirements by just filling in the basic details like your name, mobile number, residence, loan amount, email address, annual turnover & profit, etc.

Step 3: After submitting the details, the bank’s representative will contact you to verify the documents to proceed with loan formalities.

Step 4: After verification, if the bank is satisfied shall approve the loan. After loan approval, the bank shall disburse the loan amount to your mentioned bank account.

Top Banks offering Loans for Cold Storage Business

SBI, HDFC bank, Bank of India, Bank of Baroda, National Bank for Agriculture and Rural Development (NABARD), Corporation bank, Union bank of India and many more are the leading financial institutions offering business loans for cold storage business in India.

Loans & Subsidies for Cold Storage Business

To meet the lacking investment cost or to manage cash flow situation, entrepreneurs or MSMEs can apply for business loans for working capital loan to meet the working capital requirements of their business.

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

To start a cold storage business, the business owner needs to create a detailed business plan that should contain all the business-related information, details regarding products and services to be used, and employee details with full name addresses. The rest of the important takeaways are mentioned below:

1. Finalizing Location

Location plays a vital role in any business. For cold storage businesses, it should be kept as close as possible to the producing farms or consumer centers. Approximately, one acre of land is required for a multi-storage or multi-commodity cold storage facility with a capacity of 5000 metric tonnes. Rest, the area shall depend on the volume of produce that a business owner wants to keep and preserve.

2. Equipment Selection

During summers as the heat is immense, equipment to be used should be cautiously selected and installed to manage heavy loads and power cuts. There are the following factors to be considered before finalizing on equipment for cold storage, such as equipment’s age, and light, fan and product load, heat produced from stored products, ceiling, wall, floor, etc.

Basic design and requirements of an ideal Storage Unit

3. Maintenance and Cleaning

Maintenance of the cold storage plants also holds equal importance and should be checked regularly like temperature, humidity level, and preserved produce. Timely servicing or cleaning of containers, trays, and storage bins is also necessary.

4. Promotion and Target Audience

The success of a cold storage business relies on the effective implementation of marketing strategies and 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.

5. Arranging Funds

Arranging finance is one of the most difficult tasks, as the cold storage business requires substantial capital investment. Managing total investment for business from the hard-earned savings is not a viable option, nor 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 numerous loan deals available in the financial market and choose the best loan deal that suits their business requirements.

There are three kinds of storage facilities in India that include combi refrigerator rooms, industrial cool rooms, and modular refrigerator rooms.

Investment Cost includes:

Key Takeaways:

Benefits of Cold Storage

Being the second largest producer of fruits and vegetables in the world, India touches the production of approximately 260 million metric tonnes annually. India is also the world’s largest producer of milk and fruits that including mangoes, papayas, guavas, and bananas, along with substantial production of meat and poultry products. Still the nation witness nearly 4.6-15.9% wastage in fruits and vegetables annually. This wastage is due to a lack of cold storage infrastructure and modern harvesting techniques. Therefore, it becomes a greater opportunity for an entrepreneur to start a cold storage business and reduce wastage by earning high profits.

Must Read : How to get a Business Loan to Start a Business