With the amount of legislation looking favorably on the legalization of cannabis across the country—and now possibly at the federal level—there's never been a better time to look into opening a cannabis business. While cannabis businesses face a lot of specific laws and zoning requirements, a warming political climate and a robust financial future mean that hemp businesses are a solid investment moving forward. If you've been considering opening a hemp business, now is the time to secure financing.
What makes a cannabis loan company different from a traditional bank or lender? There are many differences, but the fact is that getting funding through a hemp business loan company makes sense for multiple reasons, and we're going to look at what specifically you should look for in your lender.
Securing financing for a business location is a fantastic thing, but if they can't disburse your loan quickly enough to keep another party from buying up your spot, it's not very useful. Real estate that is zoned for the cannabis business is scarce and highly competitive. If you're not able to move on purchasing a location as quickly as you can, you may lose it to another bidder.
The more quickly a lender can have the funds for your financing, the better your chances of getting the place you want. This is also a concern because highly competitive cannabis property is not only snatched up by other cannabis businesses but investors, as well.
Along with the specifics of cannabis loan, there are many things first-time cannabusiness entrepreneurs are not aware of that your lender should.
Most credit card companies will not work with a cannabis business due to the federal illegality of the product. Your loan originator should have answers for you on how your customers can pay for your goods and services. If a straightforward credit card point of sale won't work, then see if your lender has other options. Cash-only makes it difficult to do business, but many hemp loan companies have vendor workarounds that can help your customers use credit and debit cards.
Your lender should know what you will expect in terms of distribution, scaling, and open lines of credit for purchasing. No matter what part in the chain of sale you intend to operate in, there are specific costs that your cannabis lender should be able to help you with. You want someone who knows the business, is sensitive to your needs, and can be proactive in advising you on the amount of money you'd need to operate effectively.
The increase in cannabis businesses has also increased the number of lenders in this industry. Just because a company claims to be a cannabis lender, however, doesn't mean they have the experience or knowledge in the field that you want. Look for a lender that has spent years working with cannabusinesses and has a track record for helping start-ups get off the ground running.
When you're ready to take the plunge and work with a hemp business loan company, make sure you've got collateral, properly documented finances, and the best credit you can have. Ensure your lender knows the business and is ready to advise you at each point in your loan process and beyond.
Posted by Canna Business TeamFacebook
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