HOW TO FINANCE CANNABIS PROJECTS IN A POST COVID-19 WORLD
The Covid-19 pandemic, and the resulting economic consequences, is putting all businesses to the test. For cannabis entrepreneurs, this means that raising capital (never an easy task) has suddenly become even more challenging than it was only a month ago.
Many of our clients were relying on promises of capital injections which have now all but dried up. Of course, the recently announced SBA Paycheck Protection Program won’t work for cannabis businesses, since the industry is still federally illegal and is therefore banned from the Program.
There is good news, however. We work with a network of non-bank, private lenders who are still funding new transactions using non-dilutive debt capital. This will be particularly good news if, like many cannabis entrepreneurs, you’ve recently had equity sources back away from funding your new project. Borrowers must have hard assets, such as real estate or equipment, to use as collateral.
Here are some details on our programs:
Real estate loans from $500,000 to $3,000,000:
Up to 70% loan to value
Rates up from 11-15%, non-dilutive
Points negotiable depending on loan specifics
Uses of proceeds: Includes construction, renovation, cash-out for working capital, and refinance
Available for all construction types, with hybrid greenhouses at lower advance rates
Available in any state where cannabis is legal
Full personal recourse to the ownership group, with some exceptions depending on the ownership structure
Real Estate Loans of $3,000,000 or more:
Up to 100% loan to cost (construction/renovation) or 75% loan to value on existing, completed buildings
Rates up from 9-15%, non-dilutive
Points negotiable depending on loan specifics
Uses of proceeds Includes construction, cash-out for working capital, and refinance
Available for all construction types, including hybrid greenhouses
Available in any state where cannabis is legal
Full personal recourse to the ownership group, with some exceptions depending on ownership structure
Equipment Loans and Leases:
$100,000 and up
Up to 100% of cost
Best for new purchases, but refinance or cash-out of existing equipment is available on a case by case basis
8-15% for businesses with 3 years of adequate cash flow. Rate are higher for newer companies
Available in any state where cannabis is legal
Full personal recourse to the ownership group, with some exceptions depending on the ownership structure
Please contact us, and let our team of experienced commercial lending officers walk you through the process.
Be Well and Stay Safe,