CBD-Friendly Banks: From Cash Flow Management to Lending

From CBD edibles to analgesic creams, CBD products are becoming ubiquitous in everyday life, yielding sizable profits for cannabis retailers. Your U.S. cannabis company will need cash to succeed in this rapidly-growing sector. However, you’ll likely find it difficult to access financing from many banks, as they shy away due to federal and state-specific regulations.

The U.S. cannabis market could grow to $23.7 billion by 2023, and you’ll need financing from a CBD-friendly bank to position your business competitively.

What Are CBD-Friendly Banks?

CBD-friendly banks are lenders that accept CBD businesses. They provide you with funding options, such as credit lines, and process multiple types of electronic payments for clients in your cannabis store, including credit/debit cards. 

With the development of the SAFE Banking Act prohibiting federal regulators from penalizing banks that offer services to cannabis businesses, several banks are starting to work with CBD retailers to provide them with:

  • Monthly contracts. You can purchase equipment and goods via flexible short-term loan contracts.
  • Business credit cards. You can withdraw cash in minutes at ATMs or make supplier payments online.
  • Compliant systems. Your loan account will comply with federal and state marijuana, hemp, and CBD regulations.
  • Stability. You won’t risk losing access to capital just because you sell cannabis products, meaning you can confidently implement growth strategies for your CBD business.

How Can You Benefit From Finding a CBD-Friendly Bank? 

Cannabis businesses like yours are often cash rich. That’s because they don’t have the banking support needed to collect electronic payments from clients or make digital payments to their suppliers. 

Being a ready source of cash can make you a target for thieves. However, finding a CBD-friendly bank helps you to:

  • Offer clients safer payment options 
  • Punctually make payments to your suppliers 
  • Avoid having large quantities of cash in your store
  • Access a line of credit for equipment purchases and other needs

Which Services Can You Access?

You can obtain financing from Bespoke Financial — the first licensed FinTech lender in the United States to focus on the cannabis industry. You can alleviate your cash flow constraints with funding options whenever you need them. Here’s a look at how Bespoke Financial can help your CBD business grow:

Invoice Financing  

Your cannabis business must pay invoices punctually, cover operational costs, and make payroll. However, some bills might go unpaid when you have limited options to close cash flow gaps. 

With invoice financing, you’ll get an advance of up to 75% on the money that a client owes your company. So, you’ll avoid working capital strains or limits on business growth.

Inventory Financing  

At times, you might want to update your cannabis product lines or respond to high demand, but you might not have enough cash to do so. Inventory financing allows your cannabis business to acquire a revolving line of credit or a short-term loan. You can use that loan to purchase CBD products that you will sell later on. Your CBD products will be the collateral for your loan.

Purchase Order Financing  

Sometimes your business may receive a sizable official order for specific types and quantities of CBD products. This purchase order can be used to apply for and receive funding to pay your supplier when you don’t have enough cash upfront to smooth your cash flow. 

Line of Credit 

A revolving line of credit lets you cover your rent, monthly utilities, and CBD product costs without disrupting your cash flow. You can draw down capital to use as you wish, even to facilitate improvements to your store. 

How Can You Find a CBD-Friendly Bank?

Now let’s look at four steps you can follow to find a CBD-friendly bank that’s right for you:

  1. Make a shortlist of 420-friendly banks known for their expertise in the CBD sector.
  2. Unless you need treasury management or ACH services, further select small regional lenders with personalized service.
  3. Choose a trustworthy bank with multiple funding options.
  4. Select the institution with the best loan terms.

You Can Access Capital Within 24 Hours 

It’s difficult to scale a cannabis business without ready access to capital. You could receive cash in a day to scale your cannabis operations towards profitability. Visit Bespoke Financial today to prequalify for one of their financing options and give your business the boost it deserves.

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