Before you apply for cannabis business loans you will need to assess some aspects of your business. You need to make sure that you are confident in your answers to these questions ensure that you are ready to take out such a large loan. If you do not have positive answers for these questions, you should take some time to sort out your business before applying. It is not just about being rejected by the lending company. You want to make sure that you do not get in over your head with a loan that you cannot pay off. Pay close attention to the following questions and be very honest with yourself when you are answering them.
How is your credit score?
Before applying to any type of loan or financing you will need to check your credit score. If you do not already know what your credit score is you can use many websites online to check your credit. Most of the credit checking websites are free and just require your personal information to see your credit. It does not hurt your credit score if you are just checking your own credit on one of these credit score websites. So, after you look at your credit score was it in the fair to excellent range? If not you should be sure to build your credit before applying. Some ways to do this are through opening a business credit card or through other methods of financing that can build your credit. Knowing your credit score can help you to set a realistic expectation of the type of loan you will be offered.
Do you have the licenses you need?
To take out a cannabis business loan you will need to have all of the required cannabis business licenses. Keep in mind that they must be currently active. So, if you have had it in the past make sure it is still active. If you do not have the active licenses you need make sure that you apply for those and get them before applying for your loan. The lenders want to make sure that you are ready to receive the loan and that they are working with a business that is following the rules. If you already have this all set then you are one step closer to receiving your cannabis business loan.
How are your finances?
You need to take a long hard look at your finances before applying for your cannabis business loan. You will need records of your income statements, bank statements, and balance sheets. You will need to have all of this paperwork prepared before you go to apply for your loan. Also, if you are not already associated with an established bank, you will need to open an account through a bank to handle your finances. This is important so that you can have a better record of your finances and also so that you are able to make payments on your loan.
Most lenders will not accept cash as a form of payment to pay back the loan. So, you will need an established bank account so that you can pay in check or direct deposit. This is the question that you will most likely spend most of your time answering and getting in order so be prepared to dig deep in your drawers for the paperwork you need. Also, keep in mind that you may have to continue submitting the status of your finances throughout your loan term. For this reason, it may be helpful to create a system of collecting your financial history in one place if you do not already have a system like this that you use.