The cannabis industry represents billions in sales, with an economic growth potential that continues to skyrocket. The rapid growth in popularity of the cannabis industry has inspired the need for working capital loans for cannabis-related businesses at a time when it’s still a challenge to secure financing through many of the more traditional methods.
A cannabis working capital loan allows you to use your account receivables and other collateral to secure funds that would not otherwise be readily available. They often use this type of financing for short-term situations, seasonal slowdown, renovation, marketing costs, taxes, or to cover unexpected expenses. Here’s a quick overview of the most common uses for a cannabis working capital funding scenario.
Industry estimates put the number of jobs in the cannabis industry at 250,000, but that number is expected to grow to more than 330,000 jobs by 2022. Combine the growing number of jobs with the fact that jobs in the cannabis industry pay salaries that are 10% higher on average than the average US job salary, and it could be a recipe for a potential shortfall situation.
Cannabis working capital funding can offer the money to make new hires, cover bonuses or other HR expenses, or support the planning and hosting of an event for employees and/or clients. It can help bridge the gap for payment delays or cash flow shortage scenarios to ensure that they cover employee costs.
Buying equipment is expensive in nearly every industry. In the cannabis industry, it’s sometimes considered a hidden cost. While the cost for equipment for a cannabis-related business can vary, the cost of dispensary set-up alone can quickly range upwards of $250,000 depending on the location and infrastructure. Then, there’s the $65,000+ for security cameras, roll-down steel doors, etc.
This “hidden cost” is complicated by the fact that 70% of cannabis-related businesses cannot bank via traditional financial institutions. So, cannabis working capital funding allows you to ensure the safety and security of your property. A cannabis-related business must protect customers and employees by implementing the best measures available in a "risky" cash business.
Cannabis-related businesses aren’t always able to secure financing or run their books through traditional financial institutions like banks doesn’t mean that the taxman won’t come calling. Taxes are still due regardless of cash-flow issues and business expenses.
In fact, it can represent another significant cost to a cannabis-related business. So, cannabis working capital funding allows a cannabis-related business to meet the requirements of a tax bill that’s come due, without experiencing a shortfall in other areas.
Cannabis working capital funding allows a cannabis-related business to cover standard and unexpected expenses as well as taxes, payroll requirements, and other seasonal expenses. It’s also the go-to resource that supports unique and lucrative growth opportunities. It allows a cannabis-related business to host events, launch marketing campaigns, and accomplish goals that would not otherwise be possible.
There are a few standard requirements that typically ensure approval
Canna Business Financing helps businesses seeking funding. After years of working with hundreds of startups and long-term, well-established business ventures, the process is streamlined and easy-to-understand. Contact us today to learn more about options for cannabis working capital funding. You can get pre-approved in as little as 48 hours.
Posted by Canna Business TeamFacebook
In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!