Lease loans for cannabis equipment are credits that allow cannabis entrepreneurs to purchase equipment for their cannabis cultivation, production and distribution. However, the cannabis industry in the United States is still new, and although such loans now have higher interest rates, these rates should decrease as risk goes down, making financing cannabis devices a more attractive option for businesses. To grow cannabis, a company needs equipment to generate revenue, not only for the company itself, but also for its employees and customers.
Although the bureaucracy of lending to cannabis companies is still underway, equipment loans allow businesses to use their capital to get a business going. Lenders also offer entrepreneurs access to a wide range of financing options for cannabis equipment loans. Any company can be supported in all its financing needs for the facility, including working capital, debt financing and loan financing at value.
Even with no credit financing in sight, cannabis companies can lease equipment many years.
Leasing has a number of advantages, including a lower interest rate than traditional credit financing and a more flexible payment plan. Equipment loans and leases from the cannabis industry will experience higher interest rates for equipment financing than traditional companies
Traditional equipment loans charge about 5-8% interest, depending on the amount of credit, type of equipment and interest rate. Financing and leasing cannabis equipment can be a good decision for your equipment if your business or personal credit is not perfect. Approved interest rates depend on a number of factors, such as your credit history, the size of your business and your solvency. In other words, history alone may be enough to qualify a business for financing, but depending on how you buy equipment for your cannabis business, different types of financing are available. In addition to dealers selling equipment, growers can also find options for used equipment from a variety of lenders and companies.
If you’re not sure of your credit rating, you can reach out to Zena Financial to get more information about the process. Companies make quick decisions, based largely on credit values, but also on other factors, such as your company’s financial status, business plan, and history. If you are starting a cannabis business, you must confirm with your local authorities before starting that everything is legal. You may want to look for lenders who work in states where cannabis is legal to connect you with investors.
Most lenders are willing to work with companies in the cannabis industry, but for some reason most banks won’t lend you money. Some banks, such as Bank of America, Wells Fargo and Chase, are open to CBD transactions. If a small business cannot obtain a traditional loan, the SBA can provide loan guarantees of up to $500,000 to finance cannabis equipment, although not directly. On 3 April 2018 a directive came into force prohibiting the SBA’s intermediary lenders from lending to companies in the marijuana and hemp industries. The funds will be made available to private lenders and investors and will only be available to businesses and their employees to obtain loans for their cannabis equipment.
When most entrepreneurs cannot get financing from a bank, they turn to the Small Business Administration to finance themselves, such as loans from the Federal Reserve.
Working with a counselor is the best way to determine which incentive program suits the needs of your cannabis business. Find out when the easiest application process starts today and help secure your funding for a cannabis businesses. We help people in the still-growing industries to access the working capital they need to achieve meaningful, long-term success. Contact us today to get started!