3 Smart Ways to Fund a Marijuana Business

If you are seeking ways to fund a marijuana business, then you have probably already discovered that traditional bank loans are out of the question. SBA loans are likewise off the table because marijuana remains a controlled substance in the United States, which means that these federally-insured loans are not granted to fund operations within the recreational or medical marijuana industries.


So, is it even possible for a motivated entrepreneur to fund a marijuana business? Yes, but it can be challenging to find a funding source with requirements you can satisfy. Let’s take a look at some of the most feasible options available for obtaining the capital you need to launch, expand, secure, equip, staff, and advertise your marijuana business.

Using Equipment Loans to Fund a Marijuana Business


One of the most popular ways to fund a marijuana business is to secure an equipment loan to purchase or lease the vehicles, furniture, machinery, inventory, and other necessities your marijuana business requires to begin or sustain operations.

This type of loan requires an excellent credit rating and you’ll have to provide 15%-20% of the total cost of the equipment to initiate the loan. If you can contribute more than 20%, you’ll have an easier time getting financed and have lower installment payments as a result.

If you choose an equipment leasing option, you will still have to come up with the down payment and have an excellent credit score. This option to fund a marijuana business allows the lessee to use the equipment throughout the leasing period without having to worry about maintenance and repair costs. Further, when the contract ends, the lessee may enter into a new contract and receive updated equipment.

Using Short-Term Loans to Fund a Marijuana Business


Short-term loans primarily differ from traditional bank loans in that they are not based on any specific interest rate. Instead, the lender uses a special multiplier called a “factor fee” or “factor rate”. This fee adds to the amount of the loan and serves to replace traditional interest fees. The factor fee is determined by various personal factors like:

  • Revenue

  • Profitability

  • Credit card debt

  • Years in business

  • Personal credit score

  • Business credit score


The main benefit of using a short-term loan to fund a marijuana business is that you receive the money quickly, sometimes in as little as 24 hours.

Using Cannabis Lenders to Fund a Marijuana Business


Non-bank alternative lenders have made it easier than ever to fund a marijuana business. This is by far the most popular option for securing the financing needed to launch, grow, and sustain a cannabis business of any type. “Company Name” partners with a network of private cannabis lenders who specialize in these loans, which are still considered high-risk because of the current federal-level marijuana laws.

Well-qualified applicants can quickly receive the capital they need to meet financial obligations and take care of staff members and customers. Call our team of financial advisors at “Phone Number” today to discuss how we can help you fund a marijuana business and keep it operating into a lucrative future.

References
United Capital Source - Small Business Loan Options For Legal Marijuana Dispensaries & Businesses
FindLaw - How to Get Financing for a Marijuana Business
Merchant Maverick - How To Finance A Medical Marijuana Dispensary

Funding is the most important piece in any successful business plan

Our cannabis funding specialists can help you determine your eligibility to qualify for capital. No risk to you, it will not hurt your credit, and we can give you a same day approval.
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