The main reason it’s difficult to get a weed loans for a startup cannabis business is that the recreational and medical marijuana industries are heavily constricted with legal red tape. Marijuana is still an illegal, controlled substance on a federal level in the USA. Until prohibition is formally ended, the FDIC will not insure traditional major bank loans for businesses that depend on this currently-illicit substance.
Alternate Ways to Get Weed Loans
As the United States continues to trend strongly toward full marijuana decriminalization, many aspiring entrepreneurs are excited to break into the lucrative cannabis industry. This is causing record numbers of applicants for cannabis business loans, CBD business loans, hemp business loans, and various other types of weed loans.
It is not likely, at all, that you’re going to walk into Wells Fargo and obtain financing for your startup cannabis business. However, there are several options for getting the working capital you need, especially if you have excellent credit and a brilliant business idea.
Regardless of your credit score, you should approach a cannabis lender for a weed loan with a polished presentation of a well-developed business plan. Although this industry is still a budding baby, it is gaining a lot of attention and creating a lot of demand for companies that finance marijuana businesses. That means they stay busy making loans and competition for the funds is tight.
Federal laws pertaining to money laundering and lending to illegal business enterprises currently prohibit the largest banks from making weed loans. Although the cannabis industry is poised for rapid and massive growth, the current set of federal marijuana laws stands in the way of this looming economic juggernaut.
So, how is an ambitious marijuana entrepreneur to get the investment capital required to gain entry into the cannabis industry without the help of major banks? Many startup cannabis business owners take out second mortgages on their homes, secure collateral-based lines of credit, max out their credit cards, or turn to family for financial assistance.
There are some small banks and credit unions that might make a cannabis business loan, but it is rare and unlikely. There are some major cannabis industry lenders, like Snoop Dogg’s Casa Verde, for instance, but you will need to have a very polished and professional business plan ready to impress before approaching them.
Yes, weed loan options are indeed limited but here’s some good news: Cannabis Credit Lines specializes in securing financing for businesses that operate within the cannabis industry. While traditional banks are out of the picture, currently, we partner with various cannabis lenders that can provide low-interest rates on the investment capital you need to launch and grow.
Contact our skilled team of finance professionals today at (888) 699-2298 or here to discuss how we can help you get the weed loan you need for your existing or startup cannabis business. Via our network of banks and private investors, our firm has arranged multiple millions in weed loans for startup cannabis businesses over the past 2 years alone.