8 Tips for Getting Cannabis Real Estate Financing Approval

With the increasing acceptance of cannabis, many business owners are finding their current space insufficient. If you're in a similar situation, it might be time to explore the option of obtaining cannabis real estate loans.

Getting cannabis real estate loans has become easier compared to previous years. As stated by the National Association of Realtors, 18% of commercial members have seen an increase in buying rather than renting in states where cannabis is legal.

However, it's crucial for cannabis business owners to be aware that certain cities have implemented ordinances that restrict the operation of cannabis dispensaries in specific areas.

These factors can have an impact on the type of real estate you can secure, which in turn affects your business plan and the size of the real estate loan you can obtain. Having a well-defined business plan is essential as it can help you secure the best possible loan amount and favorable terms for your cannabis business.

However, before you proceed, there are some essential factors to consider. Here are some tips to help you secure real estate loans for your cannabis business:

Research Cannabis real estate lenders

The cannabis real estate lending industry is relatively new, so it's crucial to find lenders who specialize in such loans and understand the specific needs of your business. Reading client reviews can be helpful in identifying reputable Cannabis real estate funding options that cater to your niche.

Understand the Lending Requirements

Eligibility for a loan depends on various factors, including your credit score, financial history, revenue projections, and business details. Being prepared with the necessary documents can streamline the process. Additionally, compare rates and terms from different lenders before committing to one, as some may have fees that impact your financing considerations.

Have a Business Plan

Most cannabis lenders will expect to see your up-to-date business plan, including how the funds will be used, projected revenue, and profit margins. Keep in mind that real estate loans can't be used for other business purposes, so you may need a separate lender for equipment financing or other financial needs.

Be Transparent

Honesty is crucial when applying for financing. Resist the temptation to manipulate data or inflate financial projections, as such actions may lead to accusations of fraud and legal consequences.

Put Down Collateral

Secured loans require collateral to protect the lender's interests. Using your existing business property or equipment as collateral can often lead to a lower interest rate.

Consider Using Experienced Attorneys

The cannabis real estate industry can be complex, especially when dealing with local and state zoning restrictions. Enlisting the help of attorneys with experience in the cannabis industry can be beneficial in aligning real estate decisions with your business goals.

Consult Cannabis Industry Experts

Seek advice from real estate investors and financial advisers who have expertise in the cannabis industry. They can offer valuable insights into financing options and help you determine the right type of real estate assets for your business.

Find the Right Location

Location is crucial for any business, and as a cannabis entrepreneur, you must consider factors like projected demand, zoning restrictions, and the availability of commercial property in the area you're targeting. Consulting with industry professionals can provide clarity and aid in narrowing down your options when searching for commercial real estate.

In conclusion, following the mentioned tips, you can increase your chances of securing cannabis real estate loans and make well-informed decisions that benefit the business in the long run.

About - Alta Real Estate Fund's Cannabis sale-leaseback program is intended to be a flexible financing alternative. We recognize that each Cannabis business is unique, which is why we provide a variety of funding solutions that may be adapted to their specific needs. Our skilled staff has considerable expertise in the Cannabis market and is dedicated to assisting businesses in succeeding. You can contact us by writing to ir@alta-financial.com or visiting our website https://www.alta-fund.com/.