How to apply for a CBD loan
You probably are reading this because you are interested in starting a new CBD business because you have seen how profitable they are.
And yes while they can be extremely profitable they are also not the easiest business venture to get into. But why is that? Well because the laws are still very strict when it comes to CBD and cannabis operations. Everything you need to know to successfully apply and make this as easy as possible for your next business venture.
What should you have in order to apply
Before we jump into the requirements and licenses needed to apply for a CBD loan let’s see how much capital you need to apply? It is recommended that you have at least $100,000 in capital when starting up your business. You should also look into getting a business loan. Now because CBD and cannabis can be a risky venture some banks or lenders may not want to give the loan. It is best to look into a cannabis business loan simply because these banks are extremely knowledgeable in these areas and can help you a lot more.
Now that we have the capital let’s see what other financials that you need.
- Credit report: First thing you’re going to need especially if you are planning to get a loan is your credit report. Banks and lenders are going to want to see financial responsibility. Now this is not a requirement but most banks and lenders like to see you with a healthy credit score. Something in the area of 700. It is recommended that you see a financial advisor before applying for a loan as some banks and lenders have different rules and regulations for lending.
- Bank reports: The banks and lenders are going to want to see your personal bank reports. It is recommended that you have at least 6 months to a year of reports. This will help them get an idea of how much money you have coming in and how much you spend per month. You want to make sure that you have enough coming in to be able to pay back the loan in a timely manner.
- Background check: Many lenders and banks are going to want to see a background check to ensure that you are even able to be licensed to own a CBD/cannabis business.
Now let’s explore what kind of licenses and approvals you need. We are going to use California as an example of what you need. Now of course we recommend that you talk to a business attorney and a financial advisor before applying for any licenses.
For California you are going to need the type of business licenses that you have to register for. Because the FDA still does control a lot of the CBD it could be harder to get the license. You will need to obtain a state license for commercial selling activity in cannabis. You also will need to show proof of authorization from the jurisdiction you’ll be operating in before you can be granted the license.
Now that you are approved
So now that you have become approved and are ready to start your business we have a few more suggestions for you.
- Make sure that you market your business correctly: With the market semi saturated with people CBD/cannabis retailers you want to make sure that you stand apart from the others. Make sure that you have all the right materials. Signage,Web page etc.
- Keep up to date on your licenses: With the laws and regulations ever so changing you have to make sure that you do not miss a new law or regulation as failure to do so could result in your business getting shut down.