Warehousing Financing - Know the Features, Interest Rate & Eligibility

Warehouses are one of the most significant components of the supply chain that store and protect the produce from various factors that can cause harm to it. Warehouses can be in the form of Silos, Cold Storage, Marketing Infrastructure Facilities, or Cold chain infrastructure such as bulk coolers, etc. 

You can quickly get access to Warehouse Loans for agricultural and other businesses to construct and renovate warehouses with a minimum storage capacity of 5000 metric tonnes. These loans are much more affordable, with longer tenures and lower interest rates.  

You can use a Business Loan EMI calculator to estimate your monthly payment towards your warehouse finance based on the loan amount, interest rate, and tenure. Thus, this type of financing helps importers maintain safe custody of their products.

What is Loan for Warehouse?

A loan for a warehouse is a financial solution designed to assist businesses in acquiring or expanding their warehousing facilities. We at Hero FinCorp offer warehouse loans tailored to meet the specific needs of businesses. These loans provide the necessary funds to construct, purchase, or renovate a warehouse space. 

These loans can also be utilised for stocking inventory, purchasing equipment, or meeting working capital requirements. With flexible repayment terms and competitive interest rates, we ensure businesses can access the funding required to optimise their warehousing capabilities and enhance operational efficiency.

Also, those with inventory in warehouses can seek warehouse financing against their stocked commodities and use it for any purpose without restrictions. 

Features of Loan for Warehouse

Warehouse funding offers several key features that make it an attractive financing option for businesses:

• Streamlined Application Process: Warehouse funding often involves a streamlined application and approval process. Lenders with expertise in warehousing understand the industry's specific requirements and can expedite the loan approval process.

• Flexible Loan Amounts: Businesses can obtain warehouse funding for various purposes, such as purchasing or leasing a warehouse, constructing new facilities, or expanding existing ones. The loan amount can be tailored to meet specific requirements, ensuring adequate funding for the project.

• Competitive Interest Rates: Lenders offer competitive interest rates on warehouse funding based on the borrower's creditworthiness, loan duration, and borrowed amount.

• Working Capital Support: Warehouse funding can also be used to address working capital needs. This includes funding inventory purchases, managing cash flow fluctuations, and covering operational expenses related to warehousing activities.

• Repayment Flexibility: Lenders offer flexible repayment tenures to help borrowers repay the loan without stressing their business operations.

Eligibility and Eligible Commodity for Warehouse Financing

Warehouse financing can be taken by:

• Individuals or Farmers

• Sole Proprietary, Partnership Firms, Limited Companies

• Co-operatives and Agro-Processing Societies

• Agricultural Produce Marketing Committees

• Agro-Industrial & Agro-Processing Corporations

• Associations of Farmers/Cultivators

• NGOs and Self Help Groups

• Marketing Boards

Eligible Commodity for Warehouse Funding

Warehouse financing can be obtained by businesses dealing in:

• Soybeans

• Sugar

• Paddy

• Cashew

• Castor

• Chilli

• Turmeric

• Cotton

• Mustard

• Maise

• Wheat

Benefits of Loan for Warehouse

The benefits of warehouse lending are as follows:

Favorable Terms >Favorable Terms & Conditionsamp; Conditions

The terms and conditions of warehouse lending are favourable for the borrower. They can avail of the loan as per their need and repay it in a tenure of up to 5 years.

Affordable

Besides competitive interest rates, warehouse loans come with minimal processing fees and other costs, making borrowing more affordable. 

Minimal documentation

Warehouse lending comes with easy application, quick verification, limited documentation, and instant disbursals. The documentation requirements are minimal and only require identity, address, and income, besides business-related documents, previous two years' IT returns, etc.

Easy Eligibility

The eligibility criteria are simple and are generally based on the credibility and financial parameters of the borrower, including credit score, business continuity proof and financial documents. 

Fees and Charges for Loan for Warehouse

Here are the generic fees applied for warehouse lending:

Maximum Loan Amount	Up to Rs 40 Lakh
Maximum Loan Tenure	Up to 5 years
Interest Rate	15% - 30%
Processing Fees	2.50%
Bounce Charges or Dishonour Charges	Rs. 700/- (Per Instrument)
Mandate Rejection Service Charge	NIL
CCOD Annual Maintenance Charges	NA
Document Processing Charges	Documentation Charges (including Stamp Duty charges) - Loan Amount up to Rs 5.99 Lakh: Rs 2,000 + GST Loan Amount >= Rs 6 Lacs : Rs 7,000 + GST
Statement of Accounts	NIL
Foreclosure Charges	Foreclosure is not allowed within 12 months from the disbursal date. After 12 months till loan closure, the Foreclosure penalty of 4% plus applicable taxes
Loan Cancellation Charges	Rs. 15000/- towards loan cancellation or interest from the date of disbursal till the date of loan cancellation (whichever is higher)
Payment Instrument Swapping	Rs. 2,000/- + Applicable Taxes

Documents Required for Loan for Warehouse

Here are the documents typically required for a loan for a warehouse:

• Business Plan: Comprehensive business plan outlining objectives, market analysis, operations, and financial projections.

• Business Registration: Proof of business registration (certificate of incorporation, partnership deed).

• Financial Statements: Recent audited or unaudited financial statements (balance sheets, profit and loss statements, cash flow statements).

• Proof of Ownership or Lease Agreement: Documentation of warehouse ownership or lease agreement.

• Bank Statements: Last six months’ bank statements.

• Identification Proof: Valid identification documents of business owners or key stakeholders.

• Tax Returns: Income tax returns filed by the business for the previous two years.

• Additional Documents: Any specific documents required by the lender.

Ensure all documents are accurate and up-to-date for a smooth loan application process.

How to Apply for Loan for Warehouse?

Follow these simple steps to apply for warehouse financing,:

1. Research: Understand the warehouse financing requirements, eligibility criteria, and terms.

2. Prepare Documents: Gather necessary papers such as business registration, financial statements, and proof of ownership or lease agreement for the warehouse.

3. Complete Application: Fill out the Business Loan application form on the Hero FinCorp website with all the required details.

4. Submit Application: Submit the completed form along with the required documents.

5. Review and Approval: Hero FinCorp will assess your application, creditworthiness, and loan feasibility.

6. Loan Offer and Acceptance: Once approved, review the loan offer, and accept the terms if satisfactory.

7. Loan Disbursement: Hero FinCorp will transfer the funds to your account quickly.

Conclusion

The demand for warehouses is increasing by the day. Warehouses are essential for exporters and importers who need them for storing products and supplies. 

Warehouse Loans, sought by business owners engaged in building or managing warehouses, have become increasingly popular due to easy application and quick approval processes. Farmers and wholesalers can also seek warehouse loans against their commodities stored in warehouses for any financial need without end-use restrictions. 

At Hero FinCorp, you provide warehouse loans at competitive interest rates and flexible repayment tenures without hassle. Apply now!

FAQs:

1. Who owns the loans warehouse?

Warehouse Loans can be taken by Individuals or Farmers, Sole Proprietors, Partnership Firms, Limited Companies, Co-operatives, and Agro-Processing Societies, Agricultural Produce Marketing Committees, Agro-Industrial & Agro-Processing Corporations, Associations of Farmers/Cultivators, NGOs, and Self Help Groups.

2. What is warehouse debt?

Warehouse Debt is the amount of credit obtained from financial institutions based on the commodities stored in the warehouse, which can help the owner run the business smoothly with adequate finances and an easy flow of funds.

3. How does warehousing financing benefit cold storage businesses?

Warehousing financing benefits cold storage businesses by facilitating infrastructure investment for perishable goods, ensuring cost efficiency through manageable expansion costs, and enabling increased storage capacity to meet growing demand.