Are you looking to break into the cannabis industry in Oregon? If so, you’ve come to the right place! There’s a lot to know about the industry – how to run your business, where to find potential markets, and what you should do first. One of the most important first steps you can take is ensuring that your business is properly financed.
Financially supporting your cannabis business, especially when you’re just starting out, can be challenging because the selling and usage of cannabis is prohibited at the federal level. Although you’ll be operating in Oregon where cannabis consumption is legal, nationwide limitations still affect your ability to obtain a loan. We’re here to explain how you can get your business off the ground and whether or not your credit score matters when you apply for a loan.
About the Cannabis Industry
The cannabis industry is rapidly growing in states where marijuana has been legalized. But because cannabis is also a new industry, there’s a lot you need to know about running your business.
First, you’ll need a license from the state of Oregon to sell cannabis, but you cannot obtain that license until you have proven your legitimacy through your place of business and proper security. In order to obtain these aspects of your business, you will need financial support.
One of the best ways to finance your business is through a loan. Unfortunately, because cannabis is still illegal at the federal level, you cannot borrow money from an Oregon bank. However, you can borrow from a private financial firm looking to grow through Oregon cannabis businesse loans.
Taking out a loan can also provide you with additional support once your business begins. Because you can’t work with an Oregon bank, your customers will have to buy your products with cash since banks cannot process purchases through credit. This means that you will need an alternative way to store and move your cash. A financing company can help you with this too.
How Your Credit Score Can Affect Your Loan
So how can you obtain a loan? Many lending businesses are filling this gap for cannabis businessowners. To begin, make sure you have all of the documentation you need. One overlooked but important aspect is your credit score.
Although you may think that your personal credit score would not impact your business, it can be helpful or detrimental in your loan application process. Most legitimate lenders will consider your personal credit score to determine if you are reliable with money. A high credit score is especially important if you are a new businessowner.
Essentially, a high credit score can help you obtain a loan, while a low credit score can hinder you.
Ways to Boost Your Credit Score
But, don’t worry if you do not have a high credit score! There are many ways that you can boost your score so that you can obtain a loan. Here’s how:
- Figure out why your credit score is low and adjust accordingly.
- Make sure that you pay your bills on time.
- Try to eliminate outstanding debts.
- Avoid closing unused credit cards – as long as they aren’t costing you.
- Make sure that you have disputed any external sources that may be lowering your credit, such as identity theft.
It may take some time to raise your credit score, so you might want to wait before applying for a loan. However, following these tips can help you be more prepared to start your business on the right foot.
Now you know all of the ins and outs of the cannabis industry and applying for a loan. Remember that your personal credit score can make or break your loan application, but that there are many ways for you to improve this score. You’ll be bringing in cash in no time!