Banks are not giving out money to marijuana extractors and sellers at the moment. You may, therefore, find yourself stuck when you think about finding finance for equipment. One question most people have is what the big difference is between getting cannabis equipment financing and leasing the equipment. Of course, if you are only starting, you need to ensure that you make the best decisions and save as much as you can.
Equipment financing
This is merely taking out a loan to acquire equipment that will allow you to take your business to the next level. The collateral for this loan is the equipment you will buy. If you are unable to repay the loan, the guarantee will be taken by the financing body. These loans are excellent for cannabis business owners who need the equipment but are unable to come up with the full amount needed to buy it. Since the loans can be paid in monthly installments, the business owner’s financial stress is relieved. Here are some benefits of getting cannabis equipment financing:
You can get financing for the equipment and other soft costs
If you are looking for financing for the equipment, you may also not have enough money for other services like freight, installation, and taxes. With equipment financing, you could get enough money to cover these charges easily. This will help you get enough capital for other business processes that give you the freedom to get work done without feeling too much financial pressure.
Refinance the existing equipment for working capital
As a new business, you need all the money you can get to help you find the capital to extract, market, and distribute your marijuana products. Equipment financing loans can allow you to borrow money against the equipment you already have. This way, you will have enough working capital to get your business running better.
Allows you more structuring flexibility
This mode of finance makes it easier for you to pay only loan interests, defer payments, and choose other structures that will accommodate your cash flow. This will allow you to have better planning and grow your money even more. The average length of these loans is about 3-5 years. It gives you time to get your business on its feet and make sough money to pay the loans from business profit instead of looking for other modes of financing.
Conclusion
Do your researches before you select the best finance models. Choose one with low-interest rates, and that will give you enough time to repay without any stress.