Cannabis Vendor Financing
Because you need cash flow to grow
Vendor financing can level up your purchasing power
Every business owner knows it takes money to make money. But whose money should you use to make money? That’s the question, and the answer — spoiler alert — is not yours.
The savviest entrepreneurs understand the benefit of using other people’s money to pay for the goods and materials that lead to revenue.
Unfortunately, with federal laws being what they are, traditional banks and financial institutions aren’t much help to cannabis businesses like yours. Cannabis business loans just aren’t something they do. What you need is a trusted teammate with deep pockets and an even deeper understanding of the ins and outs of the cannabis industry. That’s where we come in.
FundCanna is the leading lender in the cannabis space for a reason. Not only do we have the experience and resources you need, we love this industry and want to see every last link of the supply chain sparkle and shine. We take pride in providing a wide variety of financing solutions to growing companies like yours, including Vendor Financing.
Whether you need to purchase raw materials, lease cannabis equipment, pay employees, or put fuel in your fleet of delivery trucks — whatever your needs — Vendor Financing can help free up the cash flow you need to grow.
Applying for Cannabis Vendor 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 Vendor Financing solution is right for you
How Cannabis Vendor Financing Works
Cannabis Manufacturing Company sees buying opportunity in pure biomass from cultivator.
Cannabis Manufacturing Company sends invoice for biomass to FundCanna.
FundCanna then pays the entire invoice amount to the Cultivation Company.
Cannabis Manufacturing Company pays FundCanna back in flexible payment terms.
It's that simple.
How a Cannabis Vendor Financing Works
Cannabis Manufacturing Company sees buying opportunity in pure biomass from Cultivator.
Cannabis Distribution Company requests Vendor Financing from FundCanna to cover those invoices and provide access to capital.
FundCanna then pays the entire invoice amount to the Cannabis Distribution Company.
Cannabis Distribution Company pays down their balance and collects money on terms with their vendors.
It's that simple.
Cannabis Vendor Financing FAQ's
It doesn't take much money to grow weed. While true, it is pretty much agreed upon that if you want to produce high-quality cannabis, you'll have to spend a decent amount of money to make it possible. From equipment to land to staff, it all adds up quickly. Skim on any, and you risk producing the cannabis plants and products your consumers desire.
Yes! Whether your cash flow is robust or you're chasing down a sizeable late payment from a client,vendor financing can help you with third-party goods and services.
Rather than pay a vendor for a piece of machinery, service or otherwise, vendor financing is the financial gap between
the two parties. With FundCanna, we’ll deliver the money to your vendors up front. Then you pay us back later.
Vendor financing helps fund your
cannabis company’s accounts payable
Whether your cash flow is robust or you're chasing down a sizeable late payment from a client,
vendor financing can help you with third-party goods and services.
Rather than pay a vendor for a piece of machinery, service or otherwise, vendor financing is the financial gap between
the two parties. With FundCanna, we’ll deliver the money to your vendors up front. Then you pay us back later.
We understand that today's market is rough for most companies. But in cannabis, times can be that much more difficult. Despite the ongoing Green Wave of statewide legalization and viability of brands in many states, federal lawmakers have not made significant reform progress just yet. Companies continue to be left out of banking and funding solutions, as well as standard business deductions. As such, maintaining margins can be challenging in a federally illegal marketplace.
These hurdles and more create a precarious business landscape for most cannabis brands. Even when you do everything right, circumstances out of your control can occur. These moments can upend brands, and we don't want to see that happen to you.
With vendor financing from FundCanna, you can keep your company’s bottom line robust while obtaining essential business needs and avoiding large upfront payouts.
How Vendor Financing Helps
It doesn't take much money to grow weed. While true, it is pretty much agreed upon that if you want to produce high-quality cannabis, you'll have to spend a decent amount of money to make it possible. From equipment to land to staff, it all adds up quickly. Skim on any, and you risk producing the cannabis plants and products your consumers desire.
With vendor financing, your company can afford every cost without significantly impacting its operating costs. Consider how vendor financing can help in these scenarios:
Buying Equipment
No cannabis sector is safe from high startup costs. Any company involved in cultivation, manufacturing, retail or otherwise on the supply chain will run into moments where equipment costs are mandatory for success and scalability.
No matter the sector, from agtech to lab analysis to chemical extraction and beyond, your company is looking at substantial startup costs. In most cases, the minimum overhead for machinery will run around the mid-5 figures. The sum quickly runs into the six figures in other areas, including solvent-based extraction labs and lab testing. Add on statewide licensing fees, taxes and expansion into other state markets, and you're looking at millions in expenditures.
Allow vendor financing to soften that hit on your operating costs. FundCanna will purchase the equipment for you. Then, you pay us back in agreed-upon installments.
Security
A harsh reality of America's ongoing federal cannabis prohibition is its impact on the safety of businesses, employees and the community around them.
The industry is doing its best to protect all parties, but the most crucial remedy to the problem is federal reform. Passing comprehensive legislation, or at least, a banking-focused bill could help lessen concerns.
But for now, the status quo leaves cannabis brands often having to handle millions in cash. When they do, traditional lenders steer clear of the space while thieves take notice. As a result, cannabis brands spend ample sums on security in various forms. Protection measures range from:
- Hiring security staff full-time or through third-party vendors
- Buying or renting sophisticated security systems
- Contracting cash handling services
- Storage of funds at secured off-site locations
Each of these services and their equipment costs significant sums. While protecting your personnel and assets is mandatory, the cost can be staggering to operating costs. The impact is felt that much more in cannabis because operators cannot include these expenses in their business deductions.
But with vendor financing, your business can avoid the up front sticker shock when hiring, buying or renting security services and equipment. Get the protection you need without risking your bottom line in the process.
Payroll
Payroll costs are multifaceted and can quickly eat into operating costs and bottom lines.
Traditionally, a working capital loan would cover full-time employee and contractor costs. While true, there are other payroll costs companies have to consider.
Taxes are another critical area that companies must pay attention to. With a payroll service, your company can have increased assurance that its taxes and any other fees are paid well before their deadlines.
our company can skip payroll service costs and handle things in-house. But without a payroll expert, you run a potentially higher risk of fees, fines and other penalties. Be sure to carefully assess the risk before going in-house with such a critical business component.
If you find yourself in need of payroll support, FundCanna has you covered with vendor financing solutions.
Trouble Obtaining Vendor Financing
Cannabis is rapidly becoming one of the largest markets in the US and worldwide. However, stateside brands continue to face struggles unheard of in most major markets. The most common reasons for the additional hurdles include the following:
Federal and Local Restrictions
Regulation reform has allowed cannabis companies to bank with traditional lenders after exercising additional due diligence. But the ongoing Schedule 1 status of cannabis and its subsequent federal prohibition typically keep these institutions from working with cannabis brands.
The cautionary approach has led cannabis brands to be almost entirely shut out of traditional banking and lending. Most companies can’t even have a bank account, much less obtain a loan. Until federal reform passes or changes to critical tax codes like 280E are revised, the industry will likely continue to face a cold shoulder from most banks and lenders.
This concern even extends to federally legal areas of cannabis. In recent years, hemp brands have reported financing troubles despite their sector becoming legal in 2018 via that year’s Farm Bill.
The ongoing scenario leads many to assume that financial solutions do not exist for the cannabis industry. That isn't the case. While the pathway isn't as easy as other industries have it, cannabis companies can obtain financial solutions. Let FundCanna show you how.
Cash-Only Businesses
Federal rules and regulations typically restrict cannabis companies only to accept cash payments. While some retailers have found workarounds with debit card payments and crypto, most dispensaries and other plant-touching brands only operate in cash.
The cash-only scenario annoys customers and creates much risk for cannabis brands. As mentioned above, security is a critical concern in cash-only businesses. But that isn't the only worry your cannabis company could encounter.
Financial institutions often consider cash-only businesses higher risk for two primary reasons. Federal intervention always looms overhead. But in this case, a lack of clarity is also a concern.
Banks can only assess a company's financial health as thoroughly as needed with bank statements and credit scores. Once again, federal prohibition prevents most cannabis brands from having these documents. Without a detailed analysis of the potential lender’s financial health, the financial institution would have little to no options to recover funds if the lender defaulted. Thus, many otherwise qualified cannabis brands get the cold shoulder.
High-Risk Industry
Before heaping all of the blame on these lenders and banks, consider the risks they face banking with a federally gray-area industry. They risk federal intervention and, in some cases, could worry non-cannabis clients over their banks' cannabis dealings. The latter may seem far-fetched, but stigmas still run deep in many parts of the country, especially when money is involved.
Cannabis's high-risk status could begin to change if federal lawmakers were to pass some reform. Many are hoping for a comprehensive bill to address many aspects of cannabis legality in America. Other options, like the SAFE Banking Act, would provide reform in a more narrow but substantial way.
In either case, action from Washington DC could swiftly eliminate concerns about banking and lending with the cannabis industry.
Every licensed cannabis company deserves access to banking and cannabis funding solutions, including vendor financing. Here’s how your brand can receive funding in just a few days with FundCanna:
1 - List The Equipment or Services You Want To Obtain: Choose the essentials your brand needs, then identify the ones you want to buy or lease.
2 - Gather Your Documents, Hear Results In About 24 Hours: Submit the invoice to FundCanna, and we’ll pay the invoice to your vendor.
3 - Pay Back FundCanna: Using agreed-upon terms, pay us back in increments, providing you with additional capital you wouldn't have had otherwise.
Get the funding you need. FAST.
Approvals in as little as 24 hours
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