Loans, Financing, And Capital For Cannabis & Hemp/CBD Product Manufactures
Cannabis and hemp manufacturers usually fall into one of two categories. Some of them make products like edibles, tinctures, and oils. Others provide packaging services for companies that make cannabis and hemp products. For example, a hemp company might send you a large quantity of CBD oil so you can distribute it into individual containers that get sold to consumers.
Starting and operating a manufacturing company for the cannabis and hemp industry can cost quite a bit of money. You don’t need to have cash available to purchase your business’s real estate, equipment, and supplies, though. Loans and financing options can help you build a successful business quickly while you repay the borrowed amount over several years.
Loans for Expenses Cannabis and Hemp Manufacturers Can Expect
Before you start applying for cannabis and hemp manufacturer loans, take some time to think about the types of expenses you can expect when you start or grow your business.
Regardless of what you need to buy, you cannot rely on banks and credit unions to lend you money. Luckily, plenty of private lenders are willing to step in and provide the necessary services. Canna Business Resources will help ensure that you have access to affordable loans that match your needs.
Real Estate Loans
As a cannabis and hemp manufacturing company, you will probably want to purchase warehouse space that gives you enough room to store equipment and packaged products. Leasing space can keep your upfront costs lower, but it often leads to higher long-term costs because you have to keep paying the property owner every month.
A real estate loan makes it possible for you to purchase green zone warehouses and industrial buildings without an ongoing financial commitment. Once you finish repaying the real estate loan, you own the property. At that point, you only need to pay for maintenance and property taxes. Expect to see your monthly expenses drop considerably when you finish repaying your cannabis real estate loan, making it easier for your company to generate higher profits.
Equipment Loans and Financing
Equipment loans and financing make it affordable for you to get the items you need for your cannabis and hemp manufacturing company. Loans and financing can help fund a broad range of equipment. Depending on the services you provide, you might use your loan to purchase:
Closed-loop extraction systems that pull desirable chemical compounds from cannabis and hemp plant material.
An HVAC system to control the temperature inside your warehouse or industrial space.
Machines to package cannabis products efficiently to streamline your processes and lower the amount you pay employees.
Security systems that protect your equipment and packaged products from theft.
Working Capital Loans
Operating any type of business can cost more money than expected. Cannabis and hemp companies often have even higher operational costs because they need to pay for expensive licensing. Payroll, building maintenance, equipment maintenance, and other costs can also reduce your profits significantly.
Working capital loans give you enough money to make it through short periods of financial difficulty. You don’t need to go out of business just because you have a bad month when your extraction system malfunctions and your HVAC system breaks. A working capital loan makes it possible for you to cover these expenses while meeting your payroll, insurance, and other financial needs.
What to Expect From Cannabis and Hemp Manufacturer Loans
Cannabis and hemp manufacturer loans have diverse interest rates, terms, and requirements that can differ from company to company.
Generally, you can expect real estate loans to:
Pay between $500,000 and $25 million.
Charge interest rates between 7 percent and 15 percent.
Charge 3 to 6 points.
Cover up to 70 percent of the property’s appraised value.
Offer loan terms between 6 months and 10 years.
Some factors that influence your loan include:
The property’s location.
The type of property you want to buy.
How much money you spend on your down payment.
Equipment loans usually pay amounts as low as $100,000. Most of them also have shorter terms, so you will need to repay your loan sooner.
Working capital loans are not expected to cover long-term expenses, so you will need to repay them as quickly as possible. Typically, short-term working capital loans have lower interest rates than those with longer terms.
Get Your Best Loan With Help From Canna Business Resources
The federal government makes it impossible for banks and credit unions to work with cannabis manufacturers. Some banks even worry about the potential legal ramifications of funding hemp companies that manufacture CBD and similar products.
Private lenders can give you affordable rates and reasonable terms to start or expand your business. Finding a loan, however, can feel like an intimidating process. You worry that you will spend more money than necessary or that your company will not meet its goals.
With Canna Business Resources, you get help through every stage of the borrowing process. Get started today by submitting an initial inquiry that tells us about your business and credit history. An experienced consultant will contact you shortly to talk about your options and make sure you have a loan application that will attract private lenders. Expect to get lending offers for your business soon. Then, you can choose the option that sounds right for your business.
You don’t have to go through the borrowing process alone. Canna Business Resources has years of experience in the industry, so we can provide the assistance you need to get loans and financing that help your business grow.