Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Best cannabis business loans

Find lenders willing to work with business owners in this high-risk industry.

Compare cannabis business loans Get a loan
How to finance a cannabis business Read guide

If you’re involved in the cannabis industry in any shape or form, it’s likely you already know how difficult it can be to find a lender willing to work with you. Most banks don’t offer cannabis financing because it’s just too risky.

It’s still possible to find funding for a cannabis business, despite federal roadblocks, though you’ll generally need good credit. Count on needing a credit score above 670, though some lenders on our list accept scores lower than that.

We’ve narrowed down five of the best lenders that work with cannabis businesses — or budlenders if you will.

What are the best cannabis business loans?

Best for customer service

Finance Factory business loans

Finder Rating: 4.1 / 5 ★★★★★

Finance Factory is a loan connection service with great customer reviews and has earned recognition for customer satisfaction multiple times. It works with high-risk investments like cannabis and startups. Finance Factory offers personal loans, lines of credit, revenue-based loans and advances, and equipment financing. Rates range from 5.99% to 8.75%, terms range from 24 to 60 months and loan amounts are between $5,000 to $500,000. However, you’ll need a high personal credit score of at least 600 to qualify for the business express loan. For non-startup financing, you need a credit score of at least 680.

Best for bad credit

First Down Funding business loans

Finder Rating: 4.6 / 5 ★★★★★

First Down Funding is an alternative business loan provider that offers fee-based financing with a low minimum credit score of 400. Its rates are lower than what you'll find with most alternative lenders. But it's not ideal for starting a cannabis business. It requires at least $300,000 in annual revenue, and your business must be established for at least two years to qualify for a loan.

Best term loan

Diamond business loans

Finder Rating: 3.85 / 5 ★★★★★

This California-based lender specializes in working with businesses that have struggled to find funding elsewhere — and it has a special program specifically for cannabis companies. Its rates are competitive compared to other cannabis business loans, starting at just 5.9%. The application is mainly based on your financial history, so look elsewhere if you have fair or bad credit.

Best for new businesses

United Capital Source business term loans

Finder Rating: 4.8 / 5 ★★★★★

United Capital Source is an alternative lender that offers a wide range of financing to businesses in high-risk industries, including the cannabis industry. It requires little documentation, and you might be able to qualify for a loan even if you have bad credit. However, you'll likely need to provide bank statements, so you might not get approved if you're unbanked.

Best connection service

Green Leaf Money cannabis business loans

Finder Rating: 4.2 / 5 ★★★★★

This service can help your business connect with a bank or lender that's willing to work with cannabis companies. Its partners offer relatively low rates on working capital loans, though you need good credit to qualify. But you'll have to reach out for more info — there's very little available on Green Leaf Money's website.

How we picked these lenders

We picked these lenders based on cost, availability and the ability to fund most types of cannabis businesses. We also looked for lenders that made a point they could accommodate high-risk businesses and startups, either with special programs or loans specifically for cannabis business. We also considered customer reviews, reputation and Better Business Bureau (BBB) accreditation and ratings.

Since no one loan is best for every business, we made sure to include lenders that offered different types of funding to fit a variety of business needs.

What changed in 2022?

We added Finance Factory to our list of best cannabis loans, due to its high customer ratings and willingness to work with high-risk businesses and startups.

How to qualify for a cannabis business loan

Business financing is different when it comes to the cannabis industry. Since many cannabis businesses don’t have financial business records, your eligibility often heavily depends on your personal financial history.

Here’s what you may need to qualify:

  • Good personal credit. Generally, you’ll need a credit score of 670 or higher to qualify for a good deal on a cannabis business loan.
  • Long credit history. The length of your credit history can also affect your application. Typically, you’ll need at least three years.
  • No bankruptcies. You usually can’t have bankruptcies or other negative marks like tax liens or foreclosures on your credit report.
  • Business bank account. While not always required, you often need to have a bank account for your cannabis business.
  • Minimum time in business. Lenders typically require you to be up and running for at least six months to a year, with a few requiring at least two years.
  • Legal status. Generally, all business owners need to be US citizens or permanent residents to qualify.

Types of cannabis business loans

There are several types of loans that you can use to fund your cannabis business. Which one is right for you depends on what you need financing for.

  • Equipment financing is a lease or loan specifically to buy equipment for cultivating, processing and other uses.
  • Working capital loans cover overhead costs like payroll and inventory when your business doesn’t have enough regular revenue.
  • Merchant cash advances give dispensaries and other consumer-facing businesses an advance on future sales, which you repay plus a fixed fee.
  • Invoice factoring allows growers and other business-facing companies to sell unpaid invoices at a discount to factoring companies. These usually come with a fee based on how long it takes for your clients to fill their invoices.
  • Purchase order financing fronts you money to fill orders from customers. Like with factoring, you repay it plus a fee when your customers pay for the order.
  • Commercial real estate loans offer financing to buy land, warehouses and other physical locations you need to operate your cannabis business.

Compare financing options for your cannabis business

1 - 3 of 3
Name Product Filter Values Min. Amount Max. Amount APR Requirements
Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500
$5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560 personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★
ROK Financial business loans
$10,000
$5,000,000
Starting at 6%
Eligibility criteria 1+ year in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
Apply for up to $5 million with a 15-second online application. Choose your best offer and get funded as soon as the same day.
Big Think Capital
Finder Rating: 4.7 / 5: ★★★★★
Big Think Capital
$10,000
$5,500,000
Starting from 6%
600+ credit score, 2 years in business, $100,000 annual revenue
loading

Compare up to 4 providers

Regulations around cannabis business loans

Cannabis is still federally illegal, so banks that offer loans to the cannabis industry could be subject to prosecution. They could also be liable if they lend to a business that breaks state law by selling to a minor or transports cannabis across state lines. These risks make it impossible for you to get a business loan from an FDIC-insured bank and hard to find funding from non-insured banks or lenders.

Additionally, cannabis businesses currently are ineligible for loans backed by the Small Business Administration, or SBA loans. This includes all types of federally funded coronavirus assistance. That’s because the SBA doesn’t offer loans to businesses that engage in illegal activity. Unless the SBA makes an exception, these low-cost loans are off the table for the cannabis industry until cannabis is legalized on the federal level.

What are some alternatives to cannabis business loans?

If you plan on starting a cannabis business and don’t qualify with an online lender, there are other creative ways to seek out funding:

  • Crowdfunding. The US Securities and Exchange Commission (SEC) allows anyone to invest up to $2,200 in small companies in exchange for a stake in the business. Companies can raise up to $1.07 million this way — and one way to do it all in one place is through crowdfunding.
  • Business lines of credit. Alternative financing companies also offer lines of credit to help cannabis businesses cover ongoing expenses, though it’s often more expensive than a loan.
  • Real estate loans. You can use these loans to buy or refinance the buildings or raw land you need to run your business.
  • Angel investors. Similar to venture capitalists, angel investors help businesses get started and typically deal with smaller amounts of money.
  • Personal loans. Got a solid credit history? You might have better luck getting approved for a personal loan. But make sure your lender allows you to put the funds toward a cannabis business.
  • Home equity loans. Homeowners can also borrow against the value of their houses with a home equity loan or line of credit. You’ll also need to make sure your use is legitimate though.
  • Private equity funding. Some private equity firms may be willing to offer short-term, high-interest loans or funding for a large stake in your company.
  • Venture capitalists. In nearly all industries, you’ll find wealthy investors interested in helping small businesses grow, often in exchange for equity.
  • Friend and family loans. Your friends and family can also invest in your business by personally lending you the funds and collecting on interest. Bring on a lawyer to help you write a legally binding contract to hold everyone accountable.

What about a cannabis business grant?

Some states offer grants to help get a cannabis business started. Depending on your home state, you may qualify for one.

For example, California has the Cannabis Equity Grants Program. Its purpose is to aid local businesses in acquiring licensees and as a way to regulate cannabis in a way that “reduces barriers to entry into the legal, regulated market,” stated on CA.gov. This program offers assistance with regulatory compliance and securing the capital necessary to start the business.

Bottom line

If you have good credit, cannabis business loans can be an affordable financing option if you’d rather retain full ownership of your business. But since it’s such a high risk for lenders, you’ll likely pay higher rates and fees than other industries.

For funding that’s more affordable with fewer requirements, check out our guide to investor crowdfunding for cannabis businesses.

More guides on Finder

Ask an Expert

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and finder.com Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

13 Responses

    Default Gravatar
    TDecember 22, 2018

    What is the best loan for funding a start up? I am working to opening a dispensary in Missouri. I need funding for the building, licensing, and inventory.

      Avatarfinder Customer Care
      JoshuaDecember 22, 2018Staff

      Hi T,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      The best loan for you would be the one that fits your needs, preference, and budget. You may want to use our comparison table above. Compare your options based on the minimum and maximum loan amount and requirements. Once you found the right one for you, click on the “Go to site” green button to learn more.

      Please make sure that you’ve read the relevant T&Cs or PDS of the loan products before making a decision. Moreover, check the eligibility requirements as well and consider whether the product is right for you.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    JohnApril 28, 2018

    I’m from the UK and know how to grow, can I get a loan to get me from the UK to the USA and get a green card, and accommodation for growing, then turn a profit and pay you back?

    I am properly good at growing, I just don’t have the funds to get there, any info would be a great help.

    Cheers

    John

      Avatarfinder Customer Care
      JoshuaApril 28, 2018Staff

      Hi John,

      Thanks for getting in touch with finder.

      Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice. You may need to directly get in touch with the companies we feature on this page to get the funding that you need. All you need to do is click on the “Go to site” green button of the company of your choice.

      It is important to note that there are eligibility requirements that you need to meet before a loan is provided. Private equity firms, venture capitalists, and other investors will likely need to be sure they have a good chance of getting a return on their money. If you are in the UK and you are looking for a loan in the US, you might have limited options or there would be a lot of challenges that you have to overcome before you get your funding.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    johndeguzmanMarch 16, 2018

    Hi,

    Thank you for contacting finder.

    I understand that you are a looking for loan options in Alaska.

    I have a link that will be helpful in giving you options for financial assistance.

    https://www.finder.com/payday-loans/alaska

    Thanks.

    John

    Default Gravatar
    JohnOctober 12, 2017

    Any recommendations on lenders in Southern California? Looking for a private money loan to purchase a commercial property for dispensary retail. Property identified. Thanks!

      Default Gravatar
      LiezlOctober 13, 2017

      Hi John,

      Thanks for reaching out. While we are unable to recommend a particular lender, you may refer to our comparison page on non-bank business loan options that might be able to finance your cannabis dispensary business. I sent in your email some articles and references on marijuana business investing that you might find helpful.

      Kind regards,
      Liezl

    Default Gravatar
    TonySeptember 27, 2017

    Are there any options in NH to grow cannibis or hemp based products for industrial use or medical use.
    I’m a farmer that handicapped and would like to explore options in the state of NH or FL.
    Is there a prevision that allows grow and mfg of cannibis based products. Turnkey operations in NH?
    Thank you

      Avatarfinder Customer Care
      HaroldSeptember 28, 2017Staff

      Hi Tony,

      Thank you for your inquiry.

      As per checking you are already in the correct page. Please review the content provided on our guide on this page there are types of financing are available for cannabis businesses. Please note that the options available is applicable only in United States.

      I hope this information has helped.

      Cheers,
      Harold

Go to site