About CBD business financing
The best CBD business financing for you is determined by your unique goals and needs. Since there are several different options out there, it may take some research to find the right choice for you. Once you set your budget, decide on your goals, and figure out your current financing needs, you’ll be ready to get started. The CBD business is fairly new and limited, so this is your time to get creative with the finances.
The main things you’ll need to consider are your supply chain costs, including raw materials, manufacturers and suppliers, packaging, shipping, storage, and order fulfillment costs. You should always shop around for the supplier that will offer the best deal and a quality product. You can get discounts by buying in bulk or signing a long-term contract. Optimize your budget, then search for the financing type that fits your needs. With this strategy, you’ll be able to grow your business as you see fit.
CBD business financing opportunities
Since CBD businesses can’t obtain funding from traditional banks and lenders, the options when it comes to funding partners are limited. However, there are a number of types of funding available, so it’s important to understand the pros and cons of each. You may or may not be eligible for a specific type of funding due to your credit score, business history, and current revenue. In addition, repayment terms and requirements vary depending on the type of financing you secure. Let’s take a better look at the options.
Personal financing
When business loans have failed, you can always apply for personal financing. You can receive one lump sum without offering collateral. The interest rates are often on the lower side, and the repayment schedule is flexible, depending on your lender, of course. These can be short-term or long-term loans, as it all depends on your needs as a business. However, they are easy to obtain and the funding turnaround is quick. However, this type of loan puts your personal finances at risk.
While this type of loan can be beneficial, it’s not for everyone. The eligibility requirements are often stricter than other funding types, and it could cause damage to your personal credit, as it requires a hard-credit inquiry during the application process. Fees can sneak up on you, as can the high monthly payment. It’s a good idea to consider all your options before committing to the first one you find.
Inventory financing
The CBD business can’t function without inventory. Some private lenders offer financing specifically for inventory. You’ll use the goods as collateral to secure the loan and pay it back with fixed monthly payments. The lender will perform regular evaluations on your inventory, too. This type of funding is often easier to obtain due to the lenient requirements and built-in collateral. You’ll be able to stock up for predicted sales and prepare for product launches with more confidence.
Keep in mind that you may not receive the full amount of funding you need to cover the expenses. Do you have enough money to cover the difference? Can you afford to pay the fixed monthly payments on top of it? Lenders may also have a loan minimum, which can make it difficult for some businesses to meet.
Crowdfunding
When lenders don’t agree to provide funds, you can always turn to crowdfunding. Crowdfunding involves pitching a product or business idea to investors. If your campaign is successful, you’ll get the capital you need through a number of smaller investments. You’ll have to be persuasive and creative to stand out from the crowd and earn their money.
You won’t need to deal with credit checks or business evaluations, as these investors are private people who can spend their money as they see fit. You can also get access to the funding quite quickly. With most crowdfunding arrangements, you’ll repay your investors with related rewards, or even a small share in your business. Keep in mind that a large portion of crowdfunding campaigns ultimately fail, so be sure to put in the time and effort to raise your chances of success.
Equity financing
If you don’t mind having business partners, equity financing might be what your business needs. You’ll sell minority shares in your company to investors, usually angel investors or venture capitalists, in exchange for the funding you need. The type of investor and the amount of shares you sell will be determined by your current revenue and future goals for the business. You won’t have to repay the money if the business fails, either.
While equity financing is a great way to get access to large sums of capital without the requirements of banks and other lenders, they’ll be entitled to a share of your profits. This may be more costly than interest on a bank loan, too. Be careful who you work with, as they also have sway when it comes to company decisions.
Revenue-based financing
If you have consistent revenue, you may be eligible for revenue-based financing. This is a loan that you repay as a percentage of your future sales. This can take a short or long period of time, depending on your sales volume and the amount of capital you secure. It’s a flexible payment option for those who can’t afford a large monthly bill from a lender. You also retain full ownership of your company.
Despite the flexibility in repayment, you should make sure you can continue to generate steady revenue before agreeing to the contract. Review your budget with a keen eye, so you can determine if this is the right choice for your business. The cost of capital when it comes to revenue-based financing is also usually higher than that of other, traditional forms of funding.
Merchant cash advance
Merchant cash advances are relatively easy to obtain, as the lenders usually have lenient requirements. No collateral is needed, and the payment schedule is flexible as you’ll repay it with a percentage of your future debit and credit card sales. Credit checks and business history evaluations aren’t always a factor in their decisions.
There’s always trade-offs when it comes to great perks, such as the high cost of capital. Since the eligibility requirements are often minimal and no collateral is necessary, your business may be considered high risk. You’ll have to make up for it with higher fees. If you fail to make your monthly payments, they can remove money from your account, regardless of sales volume, so plan carefully. This also doesn’t help build business credit, meaning you’ll have to take other steps if you’re seeking to improve your credit score.
8fig for CBD business financing
Financing can be difficult to obtain due to the nature of your CBD business. Many traditional banks and lenders can’t work with you, and some private lenders will ask too much regarding eligibility. However, 8fig believes that promising businesses shouldn’t be held back due to lack of funding. 8fig’s flexible funding and growth solution might just be the solution you need to reach your sales goals.
Why use 8fig for CBD business financing
You want a funding partner with flexible terms and lenient requirements. 8fig can provide you with funding for up to 90% of your supply chain costs, financing your inventory procurement, freight, warehousing, marketing, and more. In addition, 8fig offers you the tools and resources you need to optimize your business on many fronts. With everything you need to fund, plan, and manage your business in one easy-to-use platform, you’ll be on your way to growth in no time.
How 8fig works
1. Apply
The application process is fast and easy. Answer some questions about your business and sales, and then provide basic information about your supply chain stages and expenses.
2. Connect your store and bank account
In order to provide you with an optimized Growth Plan, 8fig requires that you connect your store and bank account to the 8fig platform.
3. Get funded
With 8fig, you can get funded in just days. Since 8fig funding is continuous, you receive capital infusions into your business right when you need it.
4. Make adjustments
If something changes and you need to adjust your payments, remittance schedules, or even funding amount, you can always do so thanks to 8fig’s flexibility.
5. Grow your business
All that’s left to do is sell, sell, sell. With 8fig, businesses are able to scale 4X as fast.
What 8fig offers in addition to financing
8fig is more than a funding solution – we’re a growth partner. With funding optimized to your supply chain costs, you’ll be able to streamline your cash flow and ensure that you have the capital you need when you need it. You’ll get the tools you need to map out your supply chain, track your sales analytics, and plan for the future.
In addition, 8fig funding is flexible. This means that you have the ability to adjust your funding plan in real time, as you inevitably deal with the ups and downs of your CBD business. 8fig sees you as a business partner, unlike other lenders who send you away after the deal is done.
Who is eligible for 8fig CBD business financing
8fig has lenient requirements compared to traditional lenders, so we won’t ask for high credit scores, lengthy trading histories, or collateral. The application process is quick and easy, too, so you can get access to funds within days, rather than weeks or months.
All 8fig requires is that you sell a product online, have 12 months of business history, bring in at least $100,000 in yearly sales, and have made an average of $8,000 or more in revenue per month for the last three months. If this sounds like you, you’ll be eligible for funding with 8fig and on your way to building a successful business.
How to apply for 8fig financing
It’s easy to apply for 8fig financing, and it only takes a few minutes. Simply answer the questions and follow the prompts and you’ll get funded in no time!