Seed To Sale Funding Blog

Finance Cannabis Projects In a Post Covid-19 World

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,

Judy, Nicole, Roslyn and Jeff

Seed To Sale Funding is a Troy, MI-based consulting firm that raises debt capital for all facets of the cannabis industry, including grow/cultivation, processing, testing, retail, and secured transportation, and craft/microbusinesses. Since bank loans are not readily available for the hemp and cannabis industry, we primarily work with a network of private sources ranging from wealthy investors, family offices, private lenders, and hard money lenders. We place loans nationally wherever cannabis is legal, including Illinois, Michigan, Oregon, Maine, Oklahoma, Vermont, New Hampshire, Rhode Island, Delaware, Massachusetts, Connecticut, New York, New Jersey, Pennsylvania, Maryland, Ohio, West Virginia, Missouri, Alaska, Minnesota, Louisiana, Florida, Arkansas, North Dakota, Colorado, New Mexico, Utah, Arizona, Washington, Oregon, California, and Nevada. Whether you are an owner of a single-location dispensary, a large multi-state operator, or anything in between, we have secured loans programs to suit your needs. Learn more at www.seedtosalefunding.com, or apply for financing here.

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