How Does a Cannabis Business Loan Differ From an SBA Business Loan

Let’s get right into the two types of business loans you are probably wondering about as you are starting your cannabis company, an SBA business loan from the United States Small Business Administration and a cannabis business loan.

Understanding the distinctions and recognizing their constraints is crucial for a successful beginning as you prepare for your financing requirements, especially when exploring options like a business loan through nav.com.

Starting a CBD business definitely requires quite a bit of capital, along with understanding the everchanging regulatory situations related to selling cannabis products. Be that as it may, cannabis is still a billion-dollar industry that is well worth your exploration to get established.

Here is a brief and beneficial comparison of how SBA business loans typically differ from cannabis business loans.

No SBA Loan for Cannabis Businesses

Yes, you read that correctly, The SBA is not currently offering loans to cannabis-based businesses. Marijuana businesses are unable to engage with the SBA’s business loan program even during the best of times. If you need funds for your business, a solution like merchant cash advance may be the one you’re looking for.

In fact, in 2019 the SBA made a statement regarding their loan, stating that they would not approve loans to businesses that they labeled as being “engaged in illegal activity under federal, state, or local law.”

This financial lending door is closed to the marijuana industry, including companies that do indirect business with cannabis companies, such as those that provide testing services, sell or install grow lights, or even offer legal and financial consultation services to those involved in the cannabis industry.

Staying Competitive

Before you start trying to grow to big too fast or dump massive heaps of cash on flash endeavors to try to play with the big boys too soon, concentrate on having the highest quality product that you can possibly provide.

Gaining a competitive advantage in the CBD industry be staying in tune with the regulations and the demands of the consumers whose hard-earned money spent on your product is what will keep you in business.

One sure-fire way to compete and build up valuable trust in your brand is to provide third-party lab testing results to prove the actual quality of your product instead of just expecting people to take your word for it.

Legal Obligations

The 2018 Farm Bill that federally legalized industrial hemp and CBD oils still made the governance of the hemp industry and CBD oil the responsibility of the FDA.

Your cannabis business is making you’re a part of an extremely scrutinized industry at the moment. In order to ensure that you can weather the storm and come out the other end as a successful brand, understand your legal obligations.

Don’t just promote the supposed advantages of CBD to stay within the regulation guidelines for your CBD products. Visit www.herbceo.com for more cannabis business tips.

As far as investment dollars are concerned, even the state of Oregon that has been way ahead of the curve when it comes to legalizing cannabis has CBA oil business owners that still need the help of reliable lending services outside of typical banks and credit unions to acquire cannabis business loans in Oregon.

Marketing and Sales

Marketing and selling CBD products is still a confusing effort for those new to the industry.  It remains pretty tough to sell CBD products on online retail platforms like Amazon or eBay. You can pretty much forget about social media advertising because paid ads for CBD products are a sure-fire way to get your company’s social accounts suspended or even banned.

You must rely on creating and circulating your own organic content that lives up to the regulations of each and every platform.

Establish your own e-commerce and/or physical retail stores. location is a must. Understand state and local laws and use organic search strategies and customer loyalty programs for promotional efforts.

Now that you are aware of the limitations associated with both SBA loans and cannabis business loans as they pertain to the marijuana industry, speak with a commercial lender that stays abreast of all the legal ramifications and can keep your cannabis company legally compliant.