Back in 2017, a study conducted by the Food Sovereignty Alliance (FSA) revealed that small dairy producers and farmers are continually coming under debt. 
However, in 2015-16, the total milk output reached 155 million tonnes, a 27% increase compared to that in 2011-12. Moreover, the total amount of milk produced in India crossed that of food grain for the first time in 2014-15.
Despite these numbers, small milk producers are going into debt primarily for large companies. The Interest Rates on Loan Against Property is very affordable for small business owners to avail it. Additionally, the government of India imposes low customs duties on milk and dairy products. Products imported from the US, EU, Australia, and New Zealand are also subsidized which hampers the business of Indian dairy producers badly.
Financial institutions in India provide a mortgage loans for a new businesses to aid owners in clearing their debts.
Thus, getting a mortgage loan for dairy producers becomes easier.
Documents Required by Financial Institutions include:
- Bank statements.
- Income tax returns.
- Audited turnovers by a CA.
- KYC documents.
- Proof of business.
The benefits of availing of a mortgage loan for a new business are:
- Low-Interest Rates
The mortgage loan interest rate is lower than all other types of credits available. Small businesses can get these loans instead of opting for financing from moneylenders.
- Flexible Loan Tenures
Mortgage loans can be stretched over a period of 20 years or even more. Thus, small dairy farm owners will get abundant time to repay their loans.
- High Financing Options
Businesses can avail of Loan Against Property for advances of up to Rs. 3.5 Crore. Hence, these loans are most suitable for consolidating debts.
- Quick Approval
Lenders can provide instant mortgage loan approval within 72 hours. NBFCs even provide doorstep service for collecting documents.
- Other Features
Two features that some financial institutions provide with their mortgage loan for new business include:
- Easy Balance Transfer
With an easy balance transfer facility, a customer can transfer the outstanding loan amount to a new lender offering lower interest rates. For this facility, the current lender may charge a nominal processing fee.
- Top-Up Loan
Customers who look to avail additional funds with their mortgage loan can do so with a top-up loan facility that comes simultaneously with a balance transfer feature.
- Online Account Management
Borrowers can access their loan accounts online anytime anywhere and keep track of their activities.
Dairy farm owners also have to fulfill the following eligibility criteria to avail of home mortgage loans:
- They need to be between the ages of 25 and 70 years.
- Owners must have a business vintage of at least 3 years.
- They must file income tax returns for the previous 1 year.
- Dairy farm owners must audit their turnovers from a CA for at least the previous year.
By providing all documents and satisfying the eligibility criterion, milk and dairy producers can enjoy the wide range of benefits of a mortgage loan for new business. Apart from debt consolidation which is a great way to manage finances, these loans can also serve several other financial needs.
Few reputed financial institutions provide a mortgage loan calculator that makes it easier for customers to calculate their EMIs online. This helps in planning the loan repayments beforehand.
Thus, a dairy firm owner can efficiently manage the debts by availing of a mortgage loan.
