Cannabis operating capital funds or merchant advances are not loans. With this product, you are advanced cash in exchange for a percentage of your daily credit and debit card sales or your monthly revenue. Working capital can be a quick and easy way for a cannabis-related business (CRB) or marijuana-related business (MRB) to get a cash advance without the need for collateral, even if you don’t have a good credit rating.
Working Capital Pros vs Cons
PROS
- Weekly and monthly payments
- Minimal paperwork and easy approval process
- Save on interest with prepayment discounts
CONS
- Higher rates for lower credit scores
- Collateral or personal guarantee may be required
- Annual cost may be higher than a longer-term loan
How does working capital financing work?
Cannabis or CBD working capital financing is a versatile tool that can help Cannabis Related Business (CRB) operators deal with the unique challenges they face. Like a Swiss army knife, this type of financing is adaptable and can be used to meet a variety of needs. Whether you are facing unexpected expenses, want to upgrade your equipment, finance a short-term project or take advantage of a new business opportunity, working capital can provide the necessary funds without the need for collateral.
The process is straightforward: you receive a lump sum advance for a short period, usually less than 2 years, and for a fee, known as the factor rate. The transfer is made through a series of installments that can be scheduled daily, weekly, fortnightly or monthly depending on your cash flow and preferences. One benefit of this type of financing is that once you repay 50% of the advance amount, you become eligible to receive additional funds, allowing you to continually invest in your business as opportunities arise.
Who is eligible for cannabis working capital?
Will your cannabis-related business (CRB) or marijuana-related business (MRB) be eligible for a cannabis cash advance?
If you have little or no collateral, limited business history, or poor credit, merchant cash advances may be the best financing solution for most businesses facing financing needs.
Many cash advance providers have easy eligibility standards, but not all accept this industry when it comes to cannabis businesses – not everyone accepts this industry as it is still illegal at the federal level. However, with UpWise Capital, most cannabis businesses should have no problem qualifying.
For cannabis businesses that earn a large portion of their revenue through credit card payments – for example, if you have a dispensary or product line – you can use merchant cash advances as a short-term financing tool. It can help with working capital, inventory, build-outs, purchasing, cannabis equipment, loan payments, unexpected payments, and more.
Also Read: How To Get Personal Loan in 5 Easy Steps? Apply Now!
How Much Do Cannabis Working Capital Funds Cost?
When considering the cost of a cannabis working capital product, it’s important to focus on the long-term benefits and growth opportunities your business will receive. While the factor rate for merchant cash advances may seem higher than traditional loans, the benefits it offers can far outweigh the cost.
Let’s take a closer look at an example: If you raised $20,000 with a factor rate of 1.18, you would need to accumulate $23,600 through your daily credit card transactions. Although the cost may be higher than expected, the flexibility and convenience of this financing option can be a game-changer for your cannabis business.
One of the main benefits of a cash advance is that it allows you to repay the loan based on your sales volume. This adaptability is especially valuable in the dynamic cannabis industry, where market conditions can fluctuate.
Plus, merchant cash advances are unsecured, meaning you don’t have to put your valuable assets, such as your home or other financial resources, at risk. This peace of mind can be invaluable while you focus on growing your business.
Another key benefit is the speed with which you can access funds. If you need cash immediately to take advantage of an exciting opportunity or overcome an unexpected challenge, a merchant cash advance can often be approved within a day or two, giving you the flexibility you need to move forward in the fast-paced cannabis industry.
Ultimately, the cost of funding cannabis working capital must be weighed against the potential for growth and success it can bring to your business. By carefully evaluating your finances and considering the unique benefits of this financing option, you can make an informed decision that sets your cannabis venture up for long-term prosperity. Don’t let cost be a barrier to exploring this powerful tool – apply today and unleash your business’s full potential!
Cash in Cannabis Merchant is used for
- Buy Inventory: Stock up on high-quality cannabis products, including flower, edibles, concentrates, and accessories, to meet customer demand and expand your offering.
- Upgrade Equipment: Invest in advanced cultivation, processing, or manufacturing equipment to improve efficiency, quality, and output.
- Expand Facilities: Acquire additional space or renovate existing facilities to increase production capacity, improve customer experience, or comply with regulatory requirements.
- Marketing and Advertising: Launch targeted marketing campaigns to attract new customers, build brand awareness, and differentiate your business in a competitive marketplace.
- Hire and Train Employees: Recruit and train top talent to ensure exceptional customer service, regulatory compliance, and smooth business operations.
- License and Permit Fees: Cover the cost of obtaining or renewing licenses and permits necessary to legally operate a cannabis business.
- Technology and software: Implement advanced POS systems, inventory management software, or security technology to streamline processes, improve data analysis, and protect your business.
Benefits of a Cannabis Advance
- Quick access to funds: Cannabis advances provide quick access to working capital, often within a few days of application, allowing you to take advantage of opportunities, meet immediate needs, and maintain a competitive edge in the fast-paced cannabis industry.
- Flexible repayment terms: With a cannabis advance, repayment is tied to your daily credit card sales, meaning you pay less during slow periods and more during high turnover. This adaptable structure helps you maintain healthy cash flow and manage market fluctuations more easily.
- Unsecured financing: Unlike traditional loans, cannabis advances do not require collateral such as real estate or equipment to secure funding. This means you can access the capital you need without putting your valuable assets at risk, giving you peace of mind and allowing you to focus on growing your business.
- Industry-specific expertise: When you choose Cannabis Advance, you’re partnering with a lender that understands the unique challenges and opportunities of the cannabis industry. This specialized knowledge enables them to provide tailored financial solutions, strategic guidance, and support to help you navigate the complexities of the marketplace and achieve your business goals.
Why Choose a Cannabis Cash Advance?
When it comes to funding your cannabis business, a merchant cash advance offers several attractive benefits that make it an attractive option for entrepreneurs in this rapidly evolving industry. One of the primary reasons to choose a cannabis cash advance is the speed and simplicity of the application process. Unlike traditional loans, which often involve lengthy paperwork and strict requirements, cash advances can be approved quickly, sometimes within a few days. This allows you to access the funds you need to take advantage of opportunities or deal with immediate expenses without delay.
Fuel Your Business Growth with Our Cannabis Financing Solutions
While the cannabis industry continues to flourish, with more and more states legalizing medical and recreational use, marijuana companies face various obstacles when it comes to securing financing from traditional lenders. Federal prohibition and the cash-intensive nature of the industry have made it challenging for cannabis entrepreneurs to access the capital they need to grow and thrive. However, at Upwise we recognize the unique financing needs of the cannabis market and are at the forefront of developing innovative solutions designed to help you succeed.
Our cannabis loans, which include revolving credit lines and equipment financing, provide the funds needed to purchase advanced equipment, upgrade facilities, expand into new markets or cover bridging debt while navigating the licensing process. We partner with credit unions and private investors who perform thorough due diligence on each client’s cannabis products, business plan and real estate loan before approving competitive financing for expansion, inventory and other critical operating expenses.
Whether you are a grower, processor or distributor of medical marijuana, CBD products or recreational cannabis, Upwise is dedicated to working closely with equipment manufacturers and industry stakeholders to ensure you have access to compatible business financing and purchasing power. Our team of experts understands the complexities of the cannabis industry and is committed to providing the financial tools and support you need to grow your operations and achieve your goals.
Don’t let a lack of funding get in the way of realizing your full potential in this rapidly evolving industry. Contact Upwise today to learn more about how our specialized marijuana business loans, cannabis working capital, and CBD financing options can help you overcome financial barriers and unlock new opportunities for growth. With our support, you can focus on what’s most important – building a successful and sustainable cannabis business that has a positive impact on your community and the entire industry.