How to Get a Loan to Open a Dispensary

Real Estate Loans

When you’re starting a dispensary, your commercial property will likely be one of the most significant costs you need to deal with. You’ll need an attractive storefront in a convenient location if you want to attract as many customers as possible. As such, many dispensary owners attain real estate loans.

Real estate loans are generally long-term loans with lower interest rates than other loan types. You can use a real estate loan to secure your commercial property, renovate the building, add what you need inside, and decorate the exterior with signage. This can help you cover some of the biggest costs for your business.

In addition to attractive interest rates, real estate loans are helpful as they’re generally secured by the building itself. If you default on your loan, the lender will take the property instead of taking your personal assets. However, keep in mind that real estate loans often also require higher down payments to secure.

Inventory Financing Loans

Getting a real estate loan to open a dispensary can help you cover your commercial property and various associated costs. However, you might need some extra funding for other aspects of your business. Stocking a dispensary can be expensive, especially as you try to keep up to date with the latest strains, edibles, oils, and other cannabis products.

As such, many cannabis business owners turn to inventory financing loans. These are short-term loans that you can use to cover inventory costs. These are ideal for dispensaries that need money to buy goods that they intend to sell later. Plus, the inventory you purchase is used as collateral for repaying the loan instead of your assets.

You might want to look for inventory financing loans if you’re trying to cover inventory costs. However, remember that these are generally short-term loans that need to be repaid fast. If you’re confident that you can recoup the money quickly enough, they can be a great option. However, if you feel that you’ll need more time to repay the loan, you might want to consider other options.

Friend & Family Loans

If you’re wondering how to get a loan to open a dispensary without dealing with interest rates and collateral, you might want to turn to friends and family. You’ll need to have a solid business plan if you want to convince people to lend you money. However, if you know people who are willing to invest, this is a smart way to fund your business.

You might find that some of your friends or family members are willing to give you a small chunk of cash to open your business. As such, you might need to lend money from a range of people to cover your expenses. In addition to your friends and family, you might want to ask your business associates and professional connections.

Of course, getting funding this way largely depends on who’s willing to lend you money. You’ll need to give people some assurance that they’re using their money wisely. You’ll also need to give them a reasonable timeline for when you can pay them back. You might want to offer them interest on their money or even a cut of your business profits.

Investors & Partners

Since getting business loans for cannabis businesses is tricky, many dispensary owners look for investors instead. The cannabis industry is taking off and there are tons of investors who are interested in supporting up-and-coming cannabis businesses. Of course, you’ll need to have a great business plan and show that you’re capable of making money.

Online cannabis business directories can often help you find willing investors. You could also use Linkedin to reach out to potential investors. Attending cannabis business events can also help you build connections and find people who are willing to invest in your business. Make sure you have an enticing elevator pitch along with a solid business plan.

In some cases, finding a partner for your dispensary is a better option. If you and another partner (or multiple partners) can pool your funds to cover your business costs, you can start your dispensary without needing much external funding. You can also present your business plan to cannabis venture capital firms. Many of these will be willing to invest for a share of your business.

Crowdfunding

Getting a loan to open a dispensary can be difficult. In many cases, you’ll need multiple funding sources. What’s more, trying to pay back all these loans can be stressful. Fortunately, you can also consider alternative funding options. For example, you might want to try crowdfunding to cover the costs of your dispensary.

Crowdfunding involves advertising your business plan via crowdsourcing services like Kickstarter and SeedInvest. It’s best to use a series of images, videos, and words to explain what’s special about your business and why people should give you money. If you can get enough people interested, you can acquire enough money to cover important business costs.

One of the good things about crowdfunding is that you can often acquire funding without needing to pay it back. However, getting enough people to donate to your business can be tough. You’ll need to stand out and you’ll also need to offer funders something in return – such as a free sample of your products after you open.

Conclusion

There are many ways to get a loan to open a dispensary. Real estate loans, inventory financing loans, and loans from friends or family can help cover many of your costs. You could also consider other options, such as term loans, investors, venture capital funding, crowdfunding, and social equity funding.

In any case, you’ll need to create an outstanding cannabis business plan to get funding. You’ll also need to market and promote your business to attract customers and pay back your loans. You can find a range of guides and products for promoting your business at Cannabis Promotions.