All businesses need funding to grow and remain competitive. There are many ways of securing a loan for most businesses, but some find it nearly impossible to raise funds. Cannabis business funding is the toughest to achieve. This is happening across the country, although the cannabis business is hot right now. New businesses in this niche are struggling to find the money needed to grow and prosper.
It is clear from the stats available that the cannabis business is not offered the same funding facilities provided to other industries. This is happening even in states where cannabis-related businesses are perfectly legal. It probably happens because many lenders see the cannabis business as too risky and want to stay away from such investments.
Why Cannabis Funding is Risky Business
Apart from the risk element, lending firms may also not fund such businesses as they are too onerous and involve complicated moves. They will have to follow specific regulations strictly. This involves tracking and reporting data to industry regulators. This may include putting more staff on duty just for tracking the movements and transactions of the cannabis business.
These unique barriers force lenders to look at cannabis businesses microscopically while assessing them for loan eligibility. The inability to raise funds using traditional methods affects cash flow and creates performance gaps. This further affects the trade cycle with their vendors and suppliers.
Why Alternative Forms of Funding Can Be a Better Option
Experts say using alternative funding is one of the more practical options available for entrepreneurs from the cannabis industry. This type of lending takes a different path and follows different rules while assessing a borrower. The usual norms such as creditworthiness and credit scores are not the parameters lenders use to decide if a cannabis business should be granted business funds.
Alternative business funding companies have a more practical and logic-based approach to lending. They look at the capabilities and needs of a business and not at its records or credit scores. They will, of course, make sure you are on the right side of the law. Verifying whether you are stringently adhering to all the rules and regulations may take some time. There are a few grey areas here, and lenders take care not to throw caution to the winds while making lending decisions.
Your Business Must Meet Specific Terms and Conditions
The best companies for business funding in New York and other states have specific rules that must be complied with to qualify for funding. The company must have been running its business for at least one year and have a decent annual revenue. They also consider monthly revenues over the past three months to qualify cannabis businesses for funding. The company must have a physical address and presence in any one of the 48 contiguous states.
Those who qualify for cannabusiness loans can get up to $2,000,000 on a daily or weekly repayment term. The funding is extended for a period of one to 24 months.
The best alternative lending service can sanction and disburse funds in as little as 24 hours if all the documents are in order.
Visit http://cannabusinessloans.com for more information in regards to cannabusiness loans