CBD companies depend on hemp farmers for high-quality flowers. Like any other business, you need working capital to run your farm, grow hemp, and supply your customers with the products they need. Sometimes, however, you may need a little extra working capital to achieve these goals, especially if you’re looking to expand your operations. That’s where hemp farm loans may come in handy. Here’s what you need to know.
Hemp Farm Loans: The Basics
Before we dive into the process of getting hemp farm loans, let’s start with a few basics.
Types of Hemp Farm Loans Available
A one-size-fits-all loan probably isn’t going to work for your hemp farm. Fortunately, you have several financing options available:
- Line of credit
- Invoice financing
- Inventory financing
- Purchase money financing
The specific eligibility requirements for hemp farm loans depend on factors such as the lender and the type of loan you need. However, most lenders generally require documents such as your licenses and financial statements.
6 Steps for Getting a Hemp Farm Loan
Ready to apply for financing for your hemp farm? The following six steps can help get you on your way.
1. Craft a Strong Business Plan
Potential lenders typically want to know who you are, who you serve, and if your farm is financially stable. Your business plan provides them with all of this information and more.
2. Prepare Your Financial Projections
Your financial projections, which should be part of your business plan, forecast your farm’s expected revenue, expenses, and cash flows. Review your most recent projections, and update them if necessary.
3. Check Your Credit History
Your prospective lenders may run both your business and personal credit histories. Those scores help them to assess how likely you are to repay your loan. Generally, those with higher scores have better odds of approval.
4. Learn About the Application Process and Timeline
Every lender works a bit differently. For instance, Bespoke Financial requires you to fill out an application and submit your most recent financial statements, a list of key personnel, and your active licenses. Approval typically occurs within a week.
5. Have Essential Documents Ready to Provide and Submit Your Application
Keep your licenses, business plan, and financial documents in an accessible location before you fill out any applications. Should a lender request information, you can find and submit it quickly.
6. Understand Common Roadblocks
Many traditional lenders are hesitant to work with hemp businesses because of the plant’s close association with cannabis. That can make getting a loan from a conventional financial institution more challenging. State and local laws can also make financing difficult.
Finding the Right Lender
The right lender can make all the difference in getting the money you need to start, run, and grow your hemp farm. Here are a few quick tips to help you find the right partner.
Research the Types of Institutions That Offer Hemp Farm Loans
Traditional banks may not be willing to work with hemp businesses, but other lenders are. Fintech companies with experience in the cannabis and hemp industries, like Bespoke Financial, are ready and willing to work with companies like yours to help you achieve your goals. Alternative solutions, such as investors and crowdfunding campaigns, may also work for you.
Compare Lenders and Loan Products
Evaluate each lender based on factors such as:
- Financing and hemp industry expertise
- Customer service
- Loan process and approval speed
You’ll also want to compare your loan options based on term flexibility, interest rates, and applicable fees.
Look Into Government Programs
It may be worth your time to check out government programs for hemp farmers and find out if you might qualify for them.
Find Hemp Farm Loans With Bespoke Financial
If you’re ready to grow your hemp farm, Bespoke Financial is here for you. With years of experience in the lending, technology, and cannabis/hemp industries, we work with you to provide you with fast, flexible financing that meets your needs and allows you to scale and grow your farm. Visit us online to apply for hemp financing today!