Financing Options for Ancillary Cannabis Businesses
Cannabis brands face additional, higher hurdles when seeking funding. Ancillary brands, in particular, can find themselves with minimal resources. Often cast aside by traditional lenders and overlooked by plant-touching-focused investors, ancillary brands sometimes fail to receive the attention they deserve.
Ancillary brands make up a more significant portion of today's cannabis marketplace. Yet still, many lenders tend to focus on companies that directly handle cannabis. Those overlooking the space are missing out on ample opportunities. In turn, ancillary brands struggle to cover day-to-day and long-term financial obligations, from marketing to tech and well beyond.
Though not subject to the federal and state regulations applied to plant-touching ventures, ancillary brands still face significant steep hurdles. Funding is a huge pain point for far too many. Thankfully, alternative lenders now provide various avenues ancillary brands can utilize to cover costs, scale and do much more.
Working capital loans are critical lifelines for companies looking to pad their bottom line, finance equipment, purchase inventory, and more. Rather than taking the upfront financial hit, lenders can cover the costs of everyday operational needs. Repayment terms then stagger the costs across numerous installments for the lending brand.
Say you're a cannabis brand in the nutrients space. Like most sectors, you are dealing with a range of competitors. Unlike legal state markets, competition is deeper than just in-state competitors. Your company faces national and even international competition. How do you best the market? How do you get consumers' attention?
You invest heavily. But instead of eating into likely thin margins, your brand can utilize a working capital loan to finance your scaling costs.
Say you're a cannabis brand in the nutrients space. Like most sectors, you are dealing with a range of competitors. Unlike legal state markets, competition is deeper than just in-state competitors. Your company faces national and even international competition. How do you best the market? How do you get consumers' attention?
You invest heavily. But instead of eating into likely thin margins, your brand can utilize a working capital loan to finance your scaling costs.
Once the product is perfected, working capital loans can help get the word out on any upcoming product releases. If your brand wants to invest in a PR or marketing campaign, you can submit a request to your lender. Once approved, the money can be used to hire additional staff, purchase marketing materials, or support other daily business needs.
Working capital loans help serve as bridges for brands looking to build awareness, fund operations and so much more. Vendor financing is another financial lifeline ancillary cannabis brands can use to grow. Like working capital, vendor financing loans allow companies to offset sticker shock. In this case, the loan applies to vendor products and services.
Rather than eating into their margins, cannabis brands can turn to alternative lenders to cover the costs of needed products and services.
Vendor financing is often associated with brands buying biomass. But that is just one of the many cannabis sectors it serves.
Packaging is no different. The space is saturated with competition, and the cost of staying competitive is steep. A lot impacts bottom lines, including operation costs, regulatory restrictions and demands for more eco-friendly packaging.
Brands need to be ready to move when the chance to get more efficient equipment or a greener packaging material comes up. If they fail to act, a competitor could easily swoop in and seize the moment. That lost opportunity can result in significant market share swings.
Vendor financing helps keep brands competitive without eating into funds needed elsewhere. Your company can send invoices to their lender, who will front the costs for any products or services required. Ancillary companies can also utilize vendor financing loans to hire security, obtain equipment, contract payroll support, and other business needs.
Much like working capital loans, ancillary brands can often receive approval in as little as a day.
Alternative lenders provide additional financing options for cannabis brands, ancillary or plant-touching. Depending on the lender and their loan terms, these options vary to some degree. Regardless, the bottom line is that financial solutions for ancillary cannabis brands exist. Brands can obtain working capital, finance vendor orders, and acquire essential equipment ranging from extraction tech to overhead lighting.
Cannabis companies can fund grow ops or just keep their office lights on with the right loan. FundCanna aims to deliver cannabis brands with financing solutions not offered by traditional lenders. Contact us to decide if an alternative financing option is right for your ancillary brand.
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