marijuana financing

Marijuana Financing: How Do Cannabis Business Loans Work?

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Financing a marijuana business can be more of a challenge than getting financing for many other business industry types.  Medical and recreational marijuana is now legalized across many states throughout the U.S. and that number is growing.  However, since it is still illegal under federal law, it’s more difficult for owners of Marijuana Related Businesses (MRB) to apply for loans, set up merchant banking accounts, process credit cards, and receive other types of financing to grow their business. 

Although financing may be limited, there are options out there.  You have to get a little creative when the more traditional options don’t pan out.  Lenders like Upwise Capital think outside the box, whether you need money to expand your business,  start up capital, or funds to purchase new equipment – there are many ways you can go about it.  

We suggest setting up a phone call with one of our Cannabis financing experts to discuss your specific business and it’s needs.  A marijuana dispensary vs a marijuana greenhouse will have different needs and require a different approach to underwriting your loan.  If you’re a start up as opposed to an established cannabis company – you will also have different needs and require a different approach.

Another option you may be considering, is equity vs debt financing to fund your marijuana business. With equity financing, you will be giving up ownership percentage in your company in exchange for the capital you need.  Most marijuana related businesses (MRB’s) we come across do not want to give up equity, because the revenue growth potential is so high within this industry.  Once the business becomes profitable, the investor will be entitled to the profits for the life of your business, which can be a huge downside to business owners.   

Debt financing, just like traditional loans, lines of credit and other financial products requires you to make payments along with interest and fees.  Since traditional bank loans and SBA loans are off the table, alternative lenders like Upwise, focus on the marijuana industry and have made it easier to receive the capital you need.  While rates and terms may not be as favorable as traditional financing, if you have a strong credit score and revenues combined with a good business plan – this can help you score affordable loans to fund operations or expansion of your marijuana business.  

Lastly, you also need to consider what type of financing you need for your marijuana business.  Whether you need a flexible line of credit or financing to purchase new grow equipment, Upwise has options available for you.  Non-dilutive working capital is also the best alternative if giving up equity is not appealing to you.  As a business owner, you retain all the equity and ownership in your business and once the capital is paid off, you don’t have any ties to the lender or investor.  

What types of financing options are available to a marijuana related business?

  • Marijuana Real Estate Loans
  • Non-Dilutive Working Capital
  • Marijuana Equipment Financing & Leasing
  • Marijuana Sale-Leasebacks
  • MRB Cash Advance

How do I get started?

Before applying for a cannabis loan, you should research the type of loan you are interested in applying for.  Make sure to get your business and personal finances in order because you will need to show proof of your ability to pay the loan back.  Gather information like balance sheets, profit and loss statements, bank statements, business plan and use of funds.  Be prepared to provide information on your key management personnel and a list of all cannabis licenses held by your company.  Once you’ve got your stuff together, you’re ready to apply and get started! 

Give Upwise Capital a call at (646) 837-5522 or email funding@upwisecapital.com to set up a phone meeting with a cannabis financing specialist.  On this introduction call, we will learn more about your business and it’s funding needs to come up with a plan and get you financing in no time.  

Interested in Funding? Don’t wait and Apply Now!

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