Is this eligible for SBA financing?

searcher profile

February 27, 2023

by a searcher in New York, NY, USA

Hi Team, I have been looking at a packaging business within the cannabis category. Does anyone here have experience in this space? Will this be just dead on arrival with SBA lenders? Curious to hear the perspective of any SBA lenders or brokers on here.

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Although Cannabis is still illegal on the Federal Level, the FDIC has approved some lenders to provide Cannabis financing, so there are traditional banks providing that financing. However, it is a tightly controlled program. However, the SBA has not approved cannabis for financing via the program, so you cannot do any SBA loan around cannabis. In fact, I had a client who was not directly dealing in cannabis but their priority customers were in the industry, and the SBA (not the lender) denied the loan because of the affiliation.
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Reply by an intermediary
from California State University, Northridge in Los Angeles, CA, USA
Can't answer that directly. But we work with cannabis clients. I know lending is tough for it. If your deal involves a real estate aspect, perhaps a sale-leaseback could fill an equity gap? Can take a look for you if so. Feel free to shoot me a DM
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