Since Cannabis is for the most part, newly legal, business owners in this sector were often forced to pay cash for virtually everything. Not every equipment finance lender offers cannabis equipment financing, but it’s becoming more and more prevalent. We operate as a broker and we’ll discuss what cannabis equipment financing options might be available with some of our equipment financing and leasing lenders. We have some lenders that will even to startups.
Cannabis Equipment Financing Option 1:
This lender can lend anywhere from $25,000 to $10,000,000 or more. Obviously, it depends on all the particulars such as time in business, the equipment, credit, etc.
With this lender, we can arrange cannabis equipment financing for equipment such as lighting, HVAC, benching, extractors, irrigation, CCTV & related cannabis equipment. This lender does lend on a nationwide basis, but the owner must be licensed and regulated by the state (I.E., it must be legal in the state the business is in).
This lender does require a 700 or higher credit score and no bankruptcies in the last 7 years. Additionally, the cannabis equipment financing lender looks to see you have not federal or state tax liens that are unresolved. They will also want to see that you’ve been in business for 2 years or more.
Initial Documentation Required for this Cannabis Equipment Financing Lender
A credit application, copy of vendor invoice/quote, Bank statements for the last 4 months and copy of your State Cannabis License. This applies to smaller requests of $25,000 – $49,999.
If you’re looking for $50,000 or more, you’ll need full financials which would include the aforementioned AND 3 years personal and business tax returns. Additionally, you’ll need to supply personal financial statements for all owners, a debt schedule, and latest interim financial statements.
Cannabis Equipment Financing Option 2:
This lender will potentially lend $500,000 to $20,000,000 and they have access to private money as well as credit union and bank money. Again, the HEMP, CBD, and Cannabis business have to be legal in the state your business is in.
Since this lender only funds large cannabis equipment financing (and real estate), your business will need to provide full financials. Application and bank statements only will not be an option.
Cannabis Equipment Financing Option 3:
In terms of what this lender offers, they can lend from $50,000 to $1,000,000. When it comes to cannabis equipment financing, they only accept full financials (application, bank statements, tax returns, etc.).
They offer cannabis equipment financing in most states where the business is legal. They do not lend in California or Louisiana.
Here is a little bit about what the owner of this lender has to say about their cannabis business financing options; “We are funding our own transactions, which makes us unique in the space. Well capitalized companies with solid management are what we have focused on, mostly “corporation only.” Although, we have done a couple start-ups based on solid collateral and decent opening balance sheets.”
Cannabis Equipment Financing Option 4:
This lender will help finance cannabis equipment to the tune of $100,000 to $600,000. They will not work with start ups and will require a personal guarantee from all shareholders.
For their cannabis, hemp, and CBD equipment finance loans, they are looking for wel -established companies in the continental US with positive trends.
Documentation-wise, they’ll require the following to consider: 1) Last three (3) years accountant prepared financial statements (or tax returns). 2) Latest 2022 interim financial statement including a balance sheet, income statement and current debt schedule. 3) Copy of the equipment quote(s). 4) Copy of applicable license(s) to confirm they can operate within this space. 5) “Manufacturing” Equipment and must be manufactured and sold in the US by a reputable, well established Vendor; further, equipment can not be custom or specialized in any way.
As far as the equipment goes, it must be manufacturing equipment. They don’t finance green houses or lighting.
Cannabis Equipment Financing Option 5:
This is an outlet we have that may even be able to work with companies that are considered start-ups (< 2 years in business). For start up cannabis equipment financing, this lender will cap your financing amount at $60,000. They will also expect to see a 20% (possibly more) down payment. A couple of other things they are looking for before they will fund your cannabis equipment financing request is a 700+ fico and 50% comparable debt.
For those in business longer than 2 years, this lender will lend on cannabis equipment to a much greater extent.
Cannabis Industry Funding Option 6:
Most of what we’ve talked about is equipment financing that does not involve real estate. However, we have several outlets that will fund real estate based transactions for Cannabis business owners. Reach out to run any scenarios to see if any our our lenders can help.