Warehouse Receipt Financing

Warehouse Receipt Financing is a method where farmers or suppliers use receipts for stored commodities as collateral to secure loans. When they deposit their goods in a warehouse, they receive a receipt verifying ownership. They can then borrow money using this receipt as proof of assets, without selling the goods immediately. The lender holds the receipt until the borrower repays the loan, at which point the goods or the receipt are returned. This helps improve liquidity for producers, allowing them to access funds early while ensuring their stored commodities are safely held as collateral.