Cannabis Equipment Financing
Get access to the capital you need to scale your business
FundCanna provides the tools to help you grow
It’s an exciting time to be in cannabis. A vast majority of Americans support legalization. An ever-increasing number of states are ditching their Draconian laws. And while some states only allow medical use, many have green lit ganja for recreational purposes. Political winds have shifted in the industry’s favor, and along with a newfound legitimacy comes an influx of talent. Lots of smart, savvy entrepreneurs are seeing the opportunity and entering the space. Across the supply chain, countless companies are innovating and iterating, bringing forth amazing new brands, products, services, and technologies. It’s an exciting time indeed.
But there’s a catch. There’s a ceiling to the cannabis industry’s growth. One that every cannabis business bumps up against – working capital. Since marijuana is still illegal on the federal level, traditional financial institutions aren’t offering business loans or lines of credit to cannabis companies. Luckily, you don’t need a traditional bank to grow your business. You don’t need a bank to get great lease terms with a low interest rate, nor do you need to tie up all your cash flow on a pricey new piece of equipment. You have options
FundCanna’s Cannabis Equipment Financing program specializes in cannabis equipment leasing and loans for small businesses (and scaling ones too!) Whether it’s extraction equipment, a new delivery truck, or you just want to upgrade existing equipment, we can help your cannabis business get what you need to succeed.
Applying for Cannabis Equipment Financing has never been easier.
Fill out the form below and have access to the capital you need in as little as 24 hours.
Explore if our Equipment Financing solution is right for you
How a Cannabis Equipment Financing Works
Cannabis Extraction Company would like to purchase a new piece of equipment.
Cannabis Extraction Company sends equipment invoice directly to FundCanna.
FundCanna pays equipment vendor directly of behalf of the Cannabis Extraction Company.
Cannabis Extraction Company makes monthly payments back to FundCanna.
How Cannabis Equipment Financing Works
Cannabis Extraction Company would like to purchase a new piece of equipment.
Cannabis Extraction Company sends equipment invoice directly to fucncanna.
FundCanna pays equipment vendor directly of behalf of the Cannabis Extraction Company
Cannabis Extraction Company makes monthly payments back to FundCanna.
Rather than absorb the financial blow all at once, companies can use a trusted lender to obtain the cash in hand needed without worrying about eating into margins or losing focus on other critical, expensive areas of operation.
Cannabis equipment financing works like any other business equipment loan, whereby a lender provides the money you need to obtain equipment for your business.
Equipment financing provides your business with the cash flow needed to acquire and maintain expensive equipment such as extraction equipment, vehicles, HVAC, etc.
By paying for that costly equipment you need to buy or rent, FundCanna’s equipment funding loan softens the blow on your bottom line, protecting you from significant up-front financial obligations.
Companies use working capital as a bridge to reach the next phase of their business growth plan.
Buying cannabis equipment is difficult for any venture, new or existing. Even if you have got the money to cover these expenses, the process can put immense stress on your cash flow, making it difficult for you to afford essential business expenses such as paying staff and suppliers, hiring contractors, marketing your business, paying utilities, and so much more.
Equipment financing loans help businesses
purchase or lease hard assets
Rather than absorb the financial blow all at once, companies can use a trusted lender to obtain the cash in hand needed
without worrying about eating into margins or losing focus on other critical, expensive areas of operation.
Cannabis equipment financing works like any other business equipment loan, whereby a lender provides the money you need to obtain equipment for your business.
Equipment financing provides your business with the cash flow needed to acquire and maintain expensive equipment such as extraction equipment, vehicles, HVAC, etc.
By paying for that costly equipment you need to buy or rent, FundCanna’s equipment funding loan softens the blow on your bottom line, protecting you from significant up-front financial obligations.
How Equipment Financing Helps
Companies use working capital as a bridge to reach the next phase of their business growth plan.
Buying cannabis equipment is difficult for any venture, new or existing. Even if you have got the money to cover these expenses, the process can put immense stress on your cash flow, making it difficult for you to afford essential business expenses such as paying staff and suppliers, hiring contractors, marketing your business, paying utilities, and so much more.
Some cannabis sectors have to worry about equipment costs more than others.
Assuming you’re in the cultivation sector, you may need to build a greenhouse, acquire harvesting and farming equipment, obtain vehicles, pay rent or mortgages, pay your staff and much more.
Maybe you’re in the lab testing sector. If so, you’ll need to acquire equipment capable of performing the following:
- High-Performance Liquid Chromatography (HPLC)
- Gas Chromatography-Mass Spectrometry (GC-MS)
- qPCR Microbial Testing
- and many more
For those in the extraction and processing sector, your equipment purchasing and maintenance expenses could quickly run into thousands of dollars, if not higher, as the need to remain safe and compliant amplifies when working with volatile solvents. Due to added safety requirements, including explosion-safe extraction sites, top-of-the-line equipment and competent staffing, chemical-based extraction operations can cost six figures or more.
Even less expensive extraction startups like solventless extraction can rapidly run into five-figure sums, though you may be able to keep costs into the four-figure sum.
The frustrations will come back if you expand into an additional state. US regulations prevent interstate cannabis commerce or shipping. Companies looking to work in two or more states must set up an entirely new production site in each state they’re licensed to operate. In other words, for every state your brand exists in, you must hire a new team for the site and buy or lease new equipment to scale legally.
It’s easy to see how the cost of equipment can easily add up to millions of dollars in non-deductible expenses. Until federal regulations change, operators in the US have to plan for these types of hurdles in the cannabis space--but they don't have to do it alone.
FundCanna offers flexible funding solutions for equipment expenses.
Should I Finance Or Lease Equipment?
Like the cannabis consumption experience, each scenario calls for different best practices. Consider your options before buying or leasing.
Buying equipment allows companies to have total ownership of the machinery while taking advantage of tax benefits. IRS tax code Section 179 is one area of particular interest.
Considered a small business-friendly tax code, Section 179 aims to promote small business scalability via business-related equipment purchases. Rather than depreciating equipment costs over five years, companies can make an immediate full deduction on depreciable assets in the tax year they are purchased.
Tax benefits make purchasing equipment worthwhile for some brands. However, it would help to consider the potential sticker shock and the risk of being saddled with old or antiquated equipment.
On the other hand, leasing provides your company with less upfront cost and fewer concerns when equipment updates arise. When buying or upgrading equipment, you won’t need to shell out the entire or most of the sum. Instead, most lease options allow for little to no down payment at the deal’s commencement. Plus, you don't have to worry about selling, disposing or otherwise offloading antiquated owned equipment.
Tax benefits are also available via business expense deductions, helping lessen lease costs.
Potential drawbacks exist. Before signing any lease, consider that the deal will cost more than an upfront purchase, as multi-year payment terms and interest rack up thousands more in overall costs. Even after paying that sum, you still aren't the equipment owner unless your lease specifies an option to purchase at the end of your deal.
Consider all the options and the potential impacts on your business before moving forward on equipment transactions.
FundCanna Equipment Financing Can Help You Buy The Equipment You Need
Buying necessary equipment can be a costly endeavor for any cannabis business. Consider some of the standard equipment used in a chemical extraction lab and their estimated costs:
- Closed-Loop Extraction System- $10,000 - $100,000
- Recirculating Chillers And Heaters- $8,000 - $15,000
- Vacuum Oven- $2,000 - $10,000
- Rotary Evaporator- $2,000 - $15,000
- Jacketed Reactor- $400 - $700
The overhead for a solventless lab is significantly less than a solvent-based lab. Still, the costs aren’t easy for most companies to take on. Consider that standard setup and its cost:
- Rosin Press- $3000 - $10,000
- Hash-Washing System- $6,000 - $13,000
- Trichome Separator- $30,000 - $45,000
- Freeze Dryer- $3,000 - $17, 500
Remember, these costs only account for the equipment. Other essential expenditures like lab construction, ancillary tools, utility bills, solvents, and many others can all serve as financial concerns.
You’ll also have to upgrade your equipment from time to time. And thanks to current US law, a new set of equipment will be needed if you start operating in a different state.
Ready to buy your next piece of equipment? FundCanna is here to help your cannabis brand grow without worrying about staggering upfront payments.
FundCanna Helps Lease The Equipment You Need
Rather than purchasing equipment, leasing allows you to rent for a period of time with a set monthly payment. Depending on the agreed-upon lease terms, your company can either purchase, return or extend the lease at the end of its stated lease period.
With terms lasting several months to a few years, companies can rent equipment without worries of being stuck with outdated or unneeded costly equipment taking up space on-site. When the time comes for an equipment upgrade, a new lease can be brokered, replacing the old equipment without your company having to worry about selling or disposing of the unneeded equipment.
Leasing options are often considered advantageous to new companies. You can invest funds into other critical business components with lower upfront costs or keep a more robust buffer on your bottom line.
Trouble Obtaining Equipment Financing
The legal cannabis industry is estimated to be worth at least $91.5 billion by 2028. Even with this unprecedented growth, the cannabis industry faces a unique challenge in a lack of financing solutions through traditional means like long-term loans, provision for depreciation, retained profits, debentures, and share capital.
Despite sentiments shifting to some degree, most traditional lenders cite two primary reasons for steering clear of cannabis:
Legal Restrictions By The Federal Government
Most big banks and traditional financing institutions shun cannabis businesses because pot is still illegal at the federal level.
Despite the federal illegality, banking institutions are finding ways to service marijuana-related businesses (MRBs). By September 2021, 755 institutions had begun servicing the sector. Still, many banks and credit card companies remain reluctant to banking or funding cannabis operations. Often, these banks and lenders fear violating various federal regulations. And while federal lawmakers currently appear to be hands-off on state cannabis laws, fears over changes in sentiments seem to keep many financial institutions from working with pot brands.
Cash-Based Businesses
While a few businesses now accept cryptocurrency, cannabis-handling ventures, from grow-ops to retail, are generally cash-based businesses. This scenario is once again attributable to federal laws and banking limitations.
Most lenders require a credit score and banking statements to qualify any loanee–eliminating a cannabis brand immediately in many cases.
With little paper trail to verify their status, lenders often regard would-be cannabis clients as high-risk with no traceable financial records or collateral. For lenders, the risk is substantial. If a cannabis client defaults on repayment terms, the financial institution would have little to nothing to collect.
Even with all these challenges, the cannabis industry has always found a way to survive and flourish. At FundCanna, we’re here to help and prove that cannabis businesses can be funded safely, flexibly, and profitably.
At FundCanna, we ensure you get access to all the equipment you need to scale your business. Here’s how to get funding in less than 48 hours:
Step 1: Identify Your Equipment Needs
Identify the equipment you’d like to purchase and gather an invoice--don't buy anything yet!
Step 2: Send FundCanna The Equipment Invoice
Send us the invoice. We'll pick up the tab, allowing you to obtain the equipment immediately without having to foot the bill.
Step 3: Repay FundCanna
Fair monthly payment options allow your company to buy or lease equipment without taking the focus off other crucial areas of business.
Read our Ultimate Guide on Cannabis Equipment Loans
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