CBD Business Loans | Qualify For CBD Lending
The current grey area of cannabis laws make obtaining CBD business loans and hemp business loans a challenge. Most lenders and banks are skeptical about extending CBD business loans due to it’s relative newness in the market. However, the good news is that it is not as difficult to obtain CBD lending as it is to secure financing for a marijuana business.
Cannabis Startup Loans is committed to helping cannabis entrepreneur’s obtain CBD business loans / hemp business loans, and assessing which type is best to meet your unique business goals. Our CBD funding program can be used for any of the various cannabis and CBD businesses. We will also offer advice for getting qualified and funded as quickly as possible.
What loan options are available for CBD businesses?
Getting a CBD business loan or hemp business loans is not as difficult as getting a marijuana loan. However, you may still have to look for alternative CBD lending entities and Cannabis Financing to get the funding you need.
Most banks and credit unions are still apprehensive about lending money or extending credit in this developing industry. Also, depending on your unique needs, it may be better to consider one of the following types of CBD business loan options:
Term CBD Business loans
A term CBD business loan will provide a lump sum of working capital to launch, sustain, or grow your business with. You’ll be required to pay back the principal plus interest within a certain period, which is typically over 1 – 10 years. Some CBD lending companies require collateral and others don’t. Collateral is property or other assets that you own that can be pledged as repayment of the loan in the case of default. These are extremely difficult to find and only private lenders offer them right now.
CBD credit lines
A credit line gives you access to a certain amount of working capital that can be used as you need it. It differs from a term loan in that you do not receive a lump sum of money. Instead, you receive permission to access a given amount of funds, as you need them, which can then be repaid in installments like the payments on a term loan. Credit lines are comparable to credit cards. You use however much of your limit as you need to, when you need to.
Vehicle & equipment loans
This type of CBD business loans is a term loan that uses the equipment and vehicles it pays for as collateral for the loan. You can borrow between 80% – 100% of the amount needed to purchase or lease the vehicles and equipment to produce, package, and move your CBD products. If you default on the loan, the equipment and vehicles will become the property of the lender.
Real estate CBD business loans
These cannabis real estate loans are usually a term loan that is to be used specifically for purchasing real estate, warehouse space, and/or retail space to operate a cannabidiol business. Read more here about our real estate financing options.
Bridge CBD Business Loans
Bridge CBD business loans are short-term loans that your cannabidiol business can use to sustain operations while awaiting a more substantial amount of funds to come through – like a real estate loan or long-term loan.
Merchant cash advances
This type of financing is often referred to as a “working capital” loan. Typically, a fixed fee is added to the principal, which is based on a percentage of your monthly gross sales.
Smart Tip: Check out alternative cannabis lenders
Finding a CBD business loan that suits your needs can be difficult. One smart way to maximize your chances of getting the funding you need is to consider Alternative Cannabis Lenders. These entities cater to the needs of ganjapreneurs in the marijuana industry – which is typically considered to be a higher-risk industry than the cannabinoid industry.
Which type of CBD business loan is best for my company?
To find the best type of CBD business loans and cannabis financing for your company, you’ll need to define exactly what need funding for. Do you need equipment to produce CBD essential oil? Vehicles to deliver your CBD products? A lump sum of cash to purchase real estate and build a headquarters?
It is smart to prioritize your needs and wants. Be sure that you actually “need” to borrow whatever amount you decide on.
If you are looking for the lowest-cost CBD business loans, then you’ll likely have to spend more time researching available options – and you may have to put up collateral to back up your loan application. Narrow down your feasible options and then reach out to the CBD lending companies you find most suitable. C
Which business expenses can I manage with CBD lending?
Once you get approved for CBD business loans, you will be able to manage the following types of business expenses:
Having access to sufficient working capital is a key to maintaining smooth operations in any business. That includes working capital for overhead expenses, payroll, and other expenses. You can utilize merchant cash advances, pre-approved credit lines, and both short- and long-term loans.
CBD equipment loans & leases
There are various types of CBD businesses including edible manufacturing facilities, essential oil extraction machines, and facilities that manufacture cannabidiol gummy bears. Some CBD businesses need vehicles to deliver their finished products to retail outlets and other distributors. Each CBD business will have unique needs for equipment, machinery, and tools to accommodate operations. Read more here about these options.
CBD Real estate Loans
A brick-and-mortar CBD business needs space! It could be a tract of land to grow the raw materials needed to manufacture cannabinoid products. Maybe a warehouse space needed to house an edible manufacturing operation. Or possibly a retail space inside a shopping mall. Whatever the case is, it’s going to require money or credit to make it happen. Read here for more info.
Vehicles & farm machinery
Some CBD businesses require large agricultural machinery to harvest raw hemp. Other companies need a fleet of delivery vehicles to transport the finished products to distribution points. Again, this is business-specific and there are no standards that apply to every business equally. Term-based CBD business loans and cannabis financing can provide the funding you need.
What do I need to apply for CBD lending?
Obtaining hemp equipment financing, cannabis lending or CBD business loans via a lender typically requires less paperwork and red tape than getting a traditional business loan from a big bank. However, you will most likely be asked for a current credit report. Some CBD lenders will also ask for personal bank statements that cover the past 3 – 6 months. Also your personal credit score and revenue are key factors for getting approved for a CBD business loan. hemp equipment financing and cannabis lending
Why do CBD lending entities require my FICO credit report?
Most lenders that specialize in CBD business loans will require a copy of your personal credit history. If there is more than one owner of your company, each will need to provide this information. CBD lenders look for candidates with credit scores around 700. Lenders look for records of on-time payments and responsible spending. Bankruptcies within the past 7 – 10 years will be problematic.
Challenges for CBD business owners
The two most common problems facing owners of CBD business are legal issues and the fact that most CBD companies are start-ups.
On the legal side of things, a new CBD business can fall into a grey area of law that many lenders consider too high-risk to bet on. Also, because cannabis laws are not uniform between states in the USA, major banks and credit unions could lose their FDIC insurance for issuing a CBD business loan for cannabis and marijuana businesses.
This limits your options for obtaining a CBD business loan. However, there are still options available from financial institutions that specialize in working with cannabinoid, hemp, and cannabis businesses. They tend to be more expensive in terms of interest and fees. They pose a higher risk to the lender and most refuse to lend in this sector without substantial collateral.
Most CBD businesses are start-ups, which is another risk factor that any type of lender will consider. Obviously, new businesses in all industries have a high chance of failure. It’s just the stats.
Operating a business obviously requires more than the cannabis financing behind it. Lenders want to see that you have a clearly-defined business plan, a feasible exit strategy, and preferably, a history of running successful businesses.
In a nutshell, undoubtedly, the odds of securing CBD business loans or credit lines from a bank or credit union are not good.
So how can I get a Hemp Equipment Financing and Cannabis Lending or a CBD Business loan?
Alternative lenders who specialize in funding marijuana and hemp business are often the best choices for those seeking CBD Business Loans or hemp business loans. The cannabidiol, hemp, and cannabis markets are all very popular right now. It’s literally a green rush! This makes obtaining CBD business loans and Cannabis financing even tougher. Furthermore, there’s a lot of competition for the funding that’s available, and decision-makers at lending institutions can afford to be picky.
Get approved for CBD business loans, hemp equipment financing and cannabis lending and maximize your chances
- Your CBD product must be analyzed for chemical composition and display this information on your company website. CBD products that are safe and tested are very important and will certainly have an impact on sales.
- Become an expert on the guidelines and regulations for CBD products in your locality and state. It should be noted, the laws in this industry are constantly in flux and change frequently. Stay on top of them to minimize your risk of legal penalties.
Finally, don’t cut corners on quality. Focus your operations of strict accordance with governmental regulations and producing high-quality products that provide real value for your customers.
The bottom line on CBD Business Loans, Hemp Equipment Financing, Cannabis Lending and Cannabis Business Loans
Obtaining a bulk sum of money or a credit line from a CBD lending institution can provide the working capital and investment capital your business needs to grow and thrive.
However, getting funding for a CBD business can be tough, particularly for start-ups. You will NOT be approved for traditional CBD business loans by a bank or credit union.
Don’t lose hope though! Cannabis Startup Loans is an alternative lender that specializes in getting ganjapreneurs the funding they need to launch, operate, and grow their CBD, hemp, marijuana, and other GREEN businesses.
We have simplified the entire process of obtaining CBD Business loans. Apply today if your personal credit score is at least 700 (in some cases 650 is ok).
Our credit-based funding solution can get you funded in as little as a few weeks! We also have one year 0% interest program to give your business time to get ahead. Our Unsecured Capital (Cash) Program goes up to $200,000 per borrower. We also have access to private money investors that will fund multi million dollar projects!
When traditional loans with banks are not an option, we will find you alternative lending sources for the CBD business and cannabis financing you need!