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How to Qualify for Cannabis Equipment Financing

Posted On: June 18, 2018 author Paul Kendall

Do you need to know How to Qualify for Cannabis Equipment Financing

No business can get away without financial struggles of some kind throughout their business lifespan. It can be especially for businesses like yours that are starting out in the cannabis growing industry. Even when states have legalized the production and sale of cannabis, there’s still a lot of work that goes into opening or sustaining your business.

If you haven’t already, you’ll need to find a viable space to operate your business, specialized cannabis grow equipment, cannabis extraction equipment, and a variety of other equipment and resources. As a startup, you’ll need to get financing to help you jumpstart your operation.

Requirements for Cannabis Equipment Financing

It should go as no surprise that your business will need to be in a state that has legalized the growth and sale of cannabis. Generally speaking, the longer you’ve been in business, the better your chances will be at securing outside financing. If you’re a startup, then this can obviously be a concern at first.

If you haven’t been in business long or are just starting out, then you’ll need to look for financing programs that target either “good” or “bad” credit. If over $50,000, both will require an analysis of your bank statements, credit applications, financials of the company, tax returns, personal financial statements, and more depending on where you get financing. The underwriters have to make sure you have the future cash flow for the monthly payments.

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How Credit Rating Plays a Role in Cannabis Equipment Financing

Any cannabis related business is going to be a risky venture for a lender of any kind. This means that when an outside financier looks at your business and/or personal financials, they’ll be trying to gauge how “risky” you are. One of the common statistics they will analyze is your credit rating.

If you’re above 650 credit, with even a little time in business, financing options are generally more open. If you don’t have “perfect” credit or multiple years of business, you’ll generally need to put in a down payment of first and last payment up front or collateral if you're getting HVAC or grow lighting.

If you’re under 650 credit, you’ll still be able to get financing for your extracting and growing equipment for cannabis. You will just face tighter restrictions, since the lending venture is riskier.

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Cannabis Growing Equipment Financing for Startups

As a startup, it’s even riskier for a lender. Generally, the same financing options are available to you as existing businesses, but you’ll just have to face higher restrictions and rates, depending on how your personal finances are analyzed.

Even in the most extreme financial situations, it’s still possible to get the funding you need. If your finances are not ideal to a lender and you’re still committed to opening a cannabis operation, complete with cannabis growing equipment, extractors, etc., then be prepared to commit collateral values equal to the financing amount you are requesting (e.g., collateral of $100,000 if seeking $100,000 in outside financing).

We've compared our financing programs to all of the rest in the industry and right now we have the most competitive financing for Cannabis Grower's and Cannabis processors.

Click here for a cannabis equipment financing calculator to calculate how much your cannabis equipment financing payments could be and how much cannabis equipment you can afford to buy based on your monthly budget.

Ready to Apply online for Cannabis Equipment financing? Feel free to call Trust Capital and speak with a cannabis equipment finance specialist that can take your application over the phone at 866-458-4777 and Discuss How to Qualify for Cannabis Equipment Financing.

More Resources

Start Up Business Financing

Financing Heavy Equipment

Medical Equipment Financing

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