Cold storage and logistics
The asset is the temperature. Everything else is a container for it.
Sec. 01 — The capital problems
What actually makes this business hard to finance.
Refrigeration is a capital item and an operating cost at once
The system costs a great deal to install and then keeps costing in electricity. High-efficiency equipment frequently pays for itself in power savings, but only if you can finance the difference in the first place.
Racking and dock equipment scale in expensive steps
Adding pallet positions means racking, sometimes mobile racking, and the floor work to support it. Dock seals, levellers and refrigerated dock space are their own line items and are routinely left out of first estimates.
Fleet replacement is relentless
Transport refrigeration units have a shorter life than the trucks they sit on. An operator running twelve reefers is effectively replacing something every year, which makes a facility arrangement more sensible than a series of one-off notes.
Power failure is an inventory loss, not a delay
You are holding someone else’s product. Backup generation sized to the load is the cheapest risk control in the building, and it is frequently deferred because it does not generate revenue.
Customers pay on terms while power bills arrive monthly
Third-party storage invoices on net 30 to net 45. Utilities, labour and lease payments do not wait, and a growing book makes that gap larger rather than smaller.
Sec. 02 — Which products fit
And why they fit here specifically.
Cold storage financing
Refrigeration, racking and dock equipment underwritten by people who know installation from hardware.
Equipment financing
Reefer units, trucks, forklifts and material handling, secured against serial-numbered assets.
Commercial real estate
Owning the warehouse rather than leasing it, once the improvements you are funding outlast the lease.
Line of credit
Bridges the gap between invoicing storage customers and paying the power bill.
Invoice factoring
Where the customer book is strong but the operating history is too short for a bank line.
Sec. 03 — Typical deal sizes
What these projects actually cost.
- Reefer unit or box replacement
- $45,000 – $180,000
- Racking and material handling
- $80,000 – $600,000
- Refrigeration system replacement
- $250,000 – $2,500,000
- Backup generation
- $60,000 – $400,000
- Warehouse purchase
- $1,500,000 – $15,000,000
Sec. 04 — Cash cycle
Seasonality, and when the money moves.
- Storage revenue is recurring and contracted, which lenders like, but it is invoiced in arrears on net 30 to net 45.
- Power is the largest variable cost and it is billed monthly regardless of occupancy.
- Occupancy peaks ahead of holiday demand in Q4 and again before grilling season, so the revenue is seasonal even when the cost base is not.
- Freight rates move independently of storage rates, so a mixed operator carries two different cycles at once.
- New capacity is dead weight until it fills, which typically takes one to three quarters and has to be financed through.
Sec. 05 — Two examples
What these files look like.
$860,000
Converting from R-22
A regional cold store replaced an ageing R-22 system with high-efficiency equipment, financed over eight years. A utility rebate covered part of the cost and was netted off the invoice, which reduced the amount financed rather than arriving later as a cheque.
Illustrative example, not a named client.
$540,000
Six reefer units on one facility
Rather than financing transport refrigeration units one at a time as they failed, an operator put a single equipment facility in place and drew against it on a replacement schedule. One approval, one rate, and no emergency purchases at emergency pricing.
Illustrative example, not a named client.
Sec. 06 — Get started