Searching for marijuana equipment financing? The marijuana industry is a capital-intensive business. To grow the product, you need lamps, warehouses, and processing facilities. Not to mention the myriad of tools and devices used to ensure your marijuana growing conditions are optimal.
The marijuana must then be picked and packed, and sent to dispensaries and budtenders throughout your state. And, of course, marijuana experts are using high-level biology to craft new strains and types.
Such businesses are also in a period of unprecedented growth. Every year the marijuana industry reports bigger and bigger profits – the problem is finding marijuana equipment financing.
Few businesses can afford to purchase equipment themselves. And leasing only eats into your profits. But with so many banks and financial institutions refusing to work with marijuana-related companies, knowing how to get started with marijuana equipment financing is difficult.
Bank with confidence. Submit your application and apply for marijuana equipment financing today!
To help, we’re going through the ten things you need to get started in cannabis equipment financing. You’ll never need to worry about expanding again. We’ve got you covered.
Your financing options will depend largely on the equipment you wish to purchase. For instance, you have a higher chance of receiving marijuana equipment financing for:
Using existing assets is the best way to boost your chances of being accepted for cannabis equipment financing. Houses can often be re-mortgaged to release the cash and support your growing business. Always factor your existing equity and assets into any marijuana equipment financing application.
How you purchase the equipment will affect the type of cannabis equipment financing available.
Suppose you have an existing marijuana bank account. In that case, it’s often easiest to use their in-house cannabis equipment financing options. They’re already aware of your credit history and will be able to advise on the best course of action.
At Safe Harbor, we only offer loans and financing agreements to members who’ve held a bank account with us for more than six months.
Your financial history will often play the biggest role in determining whether you’re accepted for cannabis equipment financing. You’ll need to be a licensed and regulated cannabis business. You’ll often need no bankruptcies for several years and a credit score of at least 550.
Because marijuana is regarded as a high-risk business, banks and other financial institutions need these financial assurances. Otherwise, the risks aren’t worth the benefits.
Leasing has its advantages. You can swap older equipment for newer models quicker, and you don’t need such a high credit score. However, the monthly payments can eat into your profit margins. Your equipment can’t be used as collateral to earn additional financing. Moreover, you can often get discounts with some vendors when you opt for a financing option.
Also, given the current climate, cannabis equipment financing is a solid hedge against inflation risks.
Traditionally, equipment loans tended to charge around 5-8% interest relative to the current market rate, credit history, and the initial down payment. However, marijuana-related businesses are, as mentioned, classified as high-risk. You can therefore expect significantly higher interest rates of 8 to 25%.
The lower end of the bracket is still somewhat reasonable. However, it is reserved exclusively for borrowers with impeccable credit histories or significant assets.
Until the bank industry opens up to marijuana businesses, rates are unlikely to change.
Technically, all marijuana banking is illegal under the Bank Secrecy Act of 1970. Nevertheless, hundreds of financial institutions now offer marijuana-related businesses access to finance. Federal banking regulators can theoretically still prosecute such institutions, though cases are rare.
You cannot finance equipment through other means, like credit cards and traditional bank loans. You must go to specialized lenders for all cannabis equipment financing.
Choosing a lender will largely depend on your circumstances. Individuals with a poor credit history (or new to the industry) will have a harder time gaining access to financing options. However, you should always look for reputable financial institutions with a solid track record of backing marijuana-related businesses.
Safe Harbor is the industry leader in marijuana banking. We understand the difficulties businesses face in attracting financing options. We offer all clients who’ve been with Safe Harbor for at least six months the chance to receive loans for commercial properties. There are four main options:
Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.
Do you own a hemp, CBD, dispensary, marijuana, or cannabis business and need a business bank account? We’ve validated over $8 billion dollars in cannabis-related funds since 2015. Bank with confidence. Bank with Safe Harbor Financial today.
Open Your Account