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.
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.
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.
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.