Cannabis & Hemp Equipment Loans
Starting a cannabis or hemp business often requires a lot of capital. Depending on the type of business you want to create, you can expect to spend money on real estate, cultivation equipment, employees, licensing, extraction systems, and packaging. These costs add up quickly, but they don’t have to make opening your business impossible. Cannabis and hemp business loans can help finance your new or growing company.
Cannabis and hemp business loans in the United States come from private lenders. Federal law prevents banks and credit unions from working with cannabis businesses. Private lenders fill the gap well, though, so you don’t have to worry about securing the money you need to get your business concept off the ground.
Before applying for cannabis and hemp business loans, you should take some time to learn about your options. A few minutes now will streamline your borrowing process by helping you focus on loans that match your business activities.
Types of Cannabis & Hemp Business Loans
Private lenders have several types of cannabis and hemp business loans. For example, you can get an equipment loan to purchase an extraction system that lets you make products such as tinctures and oils.
Some of the most popular types of cannabis and hemp business loans include:
- Business lines of credit, which act similar to credit cards because they let you use the credit to pay for any business expenses, including merchandise, irrigation systems, and security.
- Equipment leasing and financing make it possible for you to purchase new equipment or upgrade to more efficient models.
- Working capital loans that cover short-term expenses, such as payroll or keeping shelves stocked with products customers want to buy.
- Short-term working capital loans that cover immediate business expenses but require quick repayment.
- Asset-based or collateralized loans that let you use your business assets as collateral to lower the lender’s risk (and hopefully keep interest rates as low as possible).
Private lenders might also work with you to create a business loan that meets specific needs. It never hurts to ask about alternative lending opportunities, especially since private lenders have the ability to make independent decisions that might fall outside of lending norms.
Benefits of Cannabis & Hemp Business Loans
Assuming that you borrow from a reliable lender, cannabis and hemp business loans can benefit your company tremendously. Some businesses use the loans to:
- Upgrade their cultivation lighting systems to increase crop yields.
- Invest in better security systems that prevent trespassing and theft.
- Hire experienced employees that can bring unique skills to growing operations, cannabis distributors, and storefronts.
- Buy extraction equipment so they can start making high-demand products that do not require smoking or vaporization.
- Stock their shelves with top-quality cannabis and hemp products to attract customers willing to pay higher prices for the best experiences.
- Start a cannabis delivery service that improves customer access, especially for patients who might have trouble traveling to a dispensary for their medication.
The flexibility of business loans means that you can invest in practically any aspect of your cannabis business. As long as you have a good credit history, lenders will likely let you borrow the money you need to grow your business.
What to Expect From Cannabis & Hemp Business Loans
Cannabis and hemp business loans don’t always have consistent requirements or terms because you have so many options. A working capital loan, for example, probably won’t have the same interest rate as a business line of credit.
That doesn’t mean you have to enter the lending process without some expectations. The best lenders usually:
- Have competitive rates between 7 percent and 25 percent (depending on your risk evaluation).
- Use performance-based funding that gives priorities to successful businesses with strong, research-backed plans.
- Let you access funds within 15 to 45 days.
If you feel apprehensive about the lending process, 420 Loans is the perfect option for you. Every borrower gets a consultation that leads them through each step of the process and helps them highlight the positive aspects of their applications.
Use 420 Loans to Find a Loan for Your Cannabis Business
Finding the right 420 loans for your cannabis business isn’t always easy. Banks and credit unions won’t serve the industry because federal law makes it impossible for them to know whether they can offer loans without breaking laws. Private lenders fill in for traditional lenders, but you will likely discover that you have a lot of options to consider.
How do you decide which cannabis or hemp business loan is best for you?
420 Loans works with a broad range of industry professionals to offer you business loans that can help grow your company, increase revenues, and find more success. You want a loan with an affordable interest rate and good terms. Start your search by filling out an application with 420 Loans. One of our consultants will contact you to talk more about your options.