7 Questions to Ask a Cannabis Lending Company

Because of the legal status of marijuana and THC as Schedule 1 narcotics, cannabis-related businesses typically encounter obstacles with funding and financial operations. Since banks are unwilling to accept the risk of working with them, most MRBs are unable to receive financing going the traditional route.

However, even if you can’t receive a bank loan, there are other paths to obtaining operating capital. Cannabis lending companies can make it available to you. To make sure you partner with a dependable non-bank lender, double-check all terms and conditions beforehand. Read on to learn what questions to ask your lending company and gain a competitive edge in the rapidly expanding cannabis industry.

What should I ask when choosing an MRB lending company?

What should I ask when choosing an MRB lending companyKnowing where you stand before you commit to a loan is very important. If you’ve already worked out a business plan, you know exactly how much and how soon you need the funds and how you’re going to invest them. Now you have everything you need to discuss further steps with your lenders. To avoid overlooking a crucial detail, remember to touch on these key points.

  1. Do you lend to cannabis-related businesses? First things first, you’ll need to make sure that they are willing to provide financial resources to a company that operates in a high-risk industry.
  2. What are my funding options? You should explore several MRB lending opportunities and choose the one that fits the type of your business (dispensary, manufacturer, distributor, etc.), the amount and term of your loan, and other factors.
  3. How fast can I receive the funds? Sometimes, entrepreneurs may need a very expedient loan approval (for example, to urgently boost production and meet client requirements on time). See if your potential lender can meet your expectations.
  4. Does your loan term fit my business? After you’ve decided whether you require a short or long-term loan, check if the lender is able to supply you with your preferred option.
  5. What’s the interest rate and overall cost? Try comparing several options to see which one is the most affordable. The total price is an essential factor in determining how much the loan will pay off in the long run.
  6. What are my payments due? Determine what your payment schedule will be like and whether this matches your profit inflow (for example, if your earnings are pretty steady each month, regular monthly installments would probably be the most feasible option for you).
  7. What should I provide on my end? Although you’re operating in an unconventional field, MRBs apply for loans in much the same way as businesses in other industries. You will need to submit your credit risk report, bank statements and other financial documents, certificates, list of managers, and other records your lender may ask for.

How do I find one of the best cannabis lending companies?

How do I find one of the best cannabis lending companiesHandle the challenges of running a cannabis business by partnering up with Confia. We are a forward-thinking team committed to providing practical and innovative financial services. We assist dispensaries and other companies in the cannabis supply chain, making it possible for them to manage their finances in an intuitive way.

With us as your ally, you will receive easy access to reliable funding and streamlined banking. Finding a suitable financing option in a high-risk industry can be challenging, but we can secure it for you. You can expect efficient funding solutions, prompt diligence, meticulous pre-approval, and low-cost services. We’ll also make sure that every aspect of your finances stays compliant with relevant regulations.

Get in touch with us today to set your business up for success.

Best Ways to Finance Your Cannabis Business

The cannabis industry is growing by the day as more and more states pass regulations allowing for the sale of cannabis. This is great news for aspiring business owners who want a piece of the action. However, despite the fact that medicinal and recreational use of cannabis is legal or decriminalized in most states, federal bans are still in place, which creates numerous difficulties for Marijuana Related Businesses (MRBs).

If you’re looking for cannabis business loans, traditional funding options are usually out of reach. However, this is no reason to worry, since other ways to fund your MRB are available. Keep reading to discover the ins and outs of cannabis company financing and how to obtain it.

How do cannabis companies get funding?

How do cannabis companies get fundingAlthough you may expect banks to follow the wave of decriminalization and offer budding MRBs with more growth opportunities, this is unfortunately not the case. Even if cannabis is legal in your state, all cannabis-related transactions are still seen as illegal at the federal level. This is why financial institutions that are federally insured are prohibited from lending to businesses in the supply chain. It also means that you’ll need to explore other possibilities.

You can start by researching two funding options:

  1. With equity financing, you’re selling shares of your business to the lender and getting money in return. The lender’s investment is paid back through dividends. It’s only available to companies that are already in business and garnering profit.
  2. Debt financing, on the other hand, means you’re taking out a loan that you’ll be repaying later on, with interest. This is the most popular method used by new MRBs.

How to get investors for a dispensary?

As the cannabis industry gains momentum, more and more investors are becoming interested in putting their money in booming businesses in the field. If you’re managing a dispensary, you should create an elaborate business plan to boost the likelihood of attracting potential investors. Here are some ideas to use if you’re not sure how to find them:

  1. Show up at industry-relevant events: Attend seminars, conventions, and other events that connect the professionals in the industry. If you mingle with the right crowd, the chances are you’ll hear of or meet investors who are interested in working with you.
  2. Take advantage of business directories: Get the word out about your business by using online MRB directories, where investors often browse for new partners.
  3. Use online resources: Social networking sites are a great place to start developing your brand and connecting to potential investors and clients. Join groups and forums that are specifically geared toward cannabis businesses.
  4. Talk to people who’ve already been there: Ask other professionals you know how they’ve obtained funding. They could put you in touch with their investors.

How can I get access to helpful cannabis business loans?

How to get investors for a dispensaryAre you an ambitious entrepreneur searching everywhere for the right financing solution? Though you may have a harder time obtaining funding than professionals in other industries, with proper support of experts in MRB banking, you will find a suitable avenue to advance your company. If you contact Confia, a dependable banking network that assists cannabis businesses, you’ll get all the necessary financial resources to grow your brand.

We understand the industry-specific obstacles you encounter as an MRB. Our system of holistic financial services has been designed to overcome these hurdles directly. Our services include streamlined banking capabilities, integrated API compliance, dependable methods of securing financing, and competitive fees.

We’ll be your trustworthy ally throughout your journey. Reach out to us today to start your climb to the top.