Cannabis Lender Highlight: We Found a True Line of Credit for Cannabis Companies!
Here Ye, Here Ye, We Have Found the White Whale of Cannabis Loans!
For those that know me, you know I’ve been focused solely on cannabis, hemp and CBD financing for the last 7 plus years.
In all those years there has been one very elusive cannabis financing product. Yes, we have access to asset backed lines of credit. Even revenue based products that have a revolving component. But never an actual cannabis line of credit…until now!
Introducing the Cannabis Flex Line of Credit
Some of the benefits of a true line of credit are that your business can draw amounts as needed rather than taking the entire loan and paying interest on all of it from day one. You make a draw, you start paying interest on the drawn amount. The balance remains available interest free until your next draw.
Another benefit is they are not asset based. For example, they don’t require you own a building outright that is tied to the loan. Your collateral remains available for future financing needs if you want to leverage it.
In addition, this cannabis line of credit does not require a PG up until $3M (note this could change on a case-by-case basis upon how your business scores through underwriting)
What Are the General Qualifications for the Cannabis Line of Credit?
Unfortunately, there are some requirements in order to qualify for this financing product which is going to exclude a good portion of the market. But not all hope is lost. Read on to find out why.
- Minimum $12M in annual revenue
- Minimum 3 years time in business
- PG not required up to $3M (some exceptions)
- When a PG is required, they will need at least a 650 credit score
- Business checking account with a minimum of 8 revenue deposits per month
- Minimum $50K draws
- Pay interest only on what you draw, when you draw it
- Payments can be structured weekly, bi-weekly or monthly
- As you pay off each draw that amount goes back to the availability
What if We Don’t Hit the Revenue Requirement?
We are believers in full transparency. Although this still won’t cover every cannabis business, this lending partner does have resources for businesses generating at least $6M in yearly revenue.
This includes one with a line of credit and two with cash term loans or cash flow loans at this size. Great options for you to explore that will save a lot of money versus a merchant cash advance or revenue factoring loan.
Want to Learn More About this Cannabis Line of Credit?
Contact us today to schedule your no-obligation call to walk through your project, confirm you qualify for the program and prepare to engage our lender.
About the Author: Daryl Eames is the founder of Loanviser and the NH Cannabis Association. He has advocated for cannabis legalization in the state of New Hampshire and has deep experience in cannabis business loans and cannabis merchant processing, servicing the cannabis industry since 2019.
