Hemp farming is bigger than ever in the United States and many aspiring entrepreneurs are considering entry into this burgeoning industry. But how do you go about getting the hemp financing you need to launch? This article explores the truth about getting a hemp business loan.
Hemp business loans
When a lending institution considers approving hemp loans, there are several key factors that its board considers. Some of the most important factors about applicants for hemp business loans are:
The amount of acreage that is being converted to accommodate growing hemp
How reliant the applicant is or will be on the success of the hemp operation
The experience level of the applicant as a hemp grower or processor
It’s smart to be honest with yourself about these key factors for obtaining hemp financing before you actually apply for a hemp business loan.
How to get approved for hemp financing
As it is with other types of lending, the feasibility of hemp financing depends on collateral risk and repayment capacity.
Institutions that make hemp loans want to have demonstrable proof that an applicant is not totally dependent on his or her new or existing hemp farming or processing operation.
According to the US Farm Credit Administration, it’s important to have a source of income, besides the hemp farming operation, to repay the hemp loan if your crop gets destroyed or otherwise doesn’t pay off as expected.
Of course, getting hemp loans has a lot to do with having a solid credit score and a proven record of being prompt with paying off other credit lines and loans.
As it is with other businesses, it’s smart to have a professional business plan ready to present to potential lenders. Keep everything professional and your chances will improve.
What can hemp loans be used for?
Those who approved for hemp loans can use the capital for various purposes and purchases, including:
Acquiring real estate acreage suitable and large enough to support the operation
Construction of barns & other structures necessary to grow or process the hemp
Purchasing equipment for farming, processing, bookkeeping, etc
Paying wages to employees and yourself
There is a lot to consider and plan for when launching a hemp business. Be sure you have an accurate representation of your specific needs before applying for a hemp business loan.
Contact Cannabis credit lines today and learn more about hemp financing options available to you. We have helped many new and existing hemp entrepreneurs to obtain the capital they needed to launch and sustain their hemp farming and processing enterprises. We’re here to help you, too!