Funding Solutions for Cannabis Companies
One Stop Shopping for Cannabis Companies
La Quinta Capital offers licensed cannabis companies one stop shopping for their borrowing needs. Our capabilities include cannabis real estate loans, sale-leasebacks, senior secured credit facilities, and equipment financing. We have established correspondent relationships with more than 50 funding sources that include pioneering banks, hedge funds, REITs, family offices, and hard money lenders. This diverse group of funding partners allows La Quinta Capital to offer a full portfolio of financing solutions.
Bank Loans for Cannabis Companies
La Quinta Capital provides its clients with custom-tailored financing solutions on a wide variety of commercial property types. Transaction types include purchase, refinance, refinance with cash out, and sale leaseback. Property types include cultivation, manufacturing, distribution and retail.
Typical bank terms include a 25-year amortizing loan that matures either at the end of year 5 or year 10. Loan size ranges from $1,000,000 up to $15,000,000. The maximum loan to value is up to 65%, and the required debt service coverage ratio is 1.35 or greater. Rates vary, call for up to the minute quotes.
Hard Money Loans
La Quinta Capital has long-standing relationships with numerous hard money lenders that lend on cannabis real estate. Property types include cultivation, manufacturing, distribution and retail. Minimum loan size is $500,000 with some lenders willing to fund $10,000,000 and up. Most hard money loans are interest only with maturities that do not exceed 36 months. Call for additional details and rates.
Senior Secured Credit Facility
Senior secured credit facilities are an excellent option for cannabis companies that own real estate and that are seeking working capital or expansion capital. These are typically short term loans with maturities up to 60 months.
The loan is predicated upon the borrower having adequate security (collateral) which is typically a second lien on real property and/or equipment. The use of proceeds may include the purchase of equipment, expansion, and business acquisition. Loan size may range from $500,000 to $10,000,000 and higher. The loan structure may be customized to fit the borrower's needs. Call for additional information.
Equipment Financing
La Quinta Capital offers cannabis equipment financing for the cannabis industry. Our correspondent partners will lease most types of equipment commonly used in the cannabis industry. Lease terms vary subject to useful life with most leases not exceeding 60 months.
Allowable equipment may include grow lights, extractors, irrigation equipment, security equipment, packaging equipment, and delivery vehicles. Effective interest rates are subject to a variety of factors that include resale value of the leased equipment and lessee credit. Call for more information.
Sale-Leaseback
Under a sale-leaseback, the property owner sells a building to an investor. The sale-leaseback allows cannabis companies to maintain their current operations while withdrawing real estate equity for business expansion, equipment purchase, and even partner buyouts.
Lease covenants commonly are triple net (NNN) with a minimum term of 10 years. Sale-leaseback terms may be structured to accommodate special circumstances. Minimum sale-leaseback size is $2,000,000 with transactions of up to $25,000,000. Financeable property types include retail buildings, warehouses, grow buildings, and greenhouses.