Yet, just like any other type of business, funding its capital has never been easy.
In todays industry where different type of cannabis-related businesses are penetrating the industry, various ways to finance it are available. However, when it comes to cannabis-related businesses, it is pretty much surprising that financing options are getting more complex. That’s why it is very important to know the structured trade finance for this industry as well.
Considering its legalization concerns, borrowing from a bank is not a good option. But, this should not stop you from finding for the best funding option for your business like the weed stocks in Canada. Along with the laws governing the production and use of marijuana, new financing options are also opening up to help you with your weed-based business.
Financing Options Available for Cannabis Business
Since bank won’t offer financing help for weed businesses, options like these are available:
This financing option works by allowing individuals to invest around $2,000 in small firm having a stake in business in return. Generally, this is permitted by the US SEC. Via the crowdfunding, businesses can earn as much as $1 million and above. One of the equity crowdfunding platform is Fundanna which focus on financing cannabis businesses.
In most type of industries, there are some investors who are really wealthy enough interested to assist small businesses to grow. This is often operates in exchange for an equity.
Angel investors operate in a similar way like the venture capitalists. It helps business start-ups by funding them through small amounts of money.
Credit business lines
In order to help cannabis business to grow, there are alternative companies that offer credit lines. This funding option helps to cover the ongoing business expenses in starting up.
Private equity firms
These firms are financial companies that are willing to provide loans for a short-term goal with a high-interest rate. Otherwise, it also funds large cost in your business.
Alternative financing firms offering business loans
There are lenders that specialized in the cannabis business. Example of this is the Diamond Business Loans which operates to meet cannabis business needs. A standard term loan option is available for this type of funding which is payable on a one-time, big time payment.
In case you have a good credit standing, personal loan is the best option to fund your weed business start-up.
Real estate loans
Real estate loans are considered as secured loans. It is pretty much applicable to fund purchasing or refinancing of the buildings or land where your business will be operating.