CBD-Friendly Banks: 10 Best Hemp Financing Options

Nikolay Stoyanov

December 31, 2021

Are you looking for a way to finance your hemp or cannabis business? Then you’ll love our list with 10 CBD-friendly banks in 2022. Read on!

Although many people supported the legalization of CBD products, no one could expect that the industry would experience such an enormous rise in a short amount of time.

Hemp-based substances can now be found on almost any corner, and it is not surprising that more and more companies want in on the profit.

According to various financial projections, CBD sales will go all the way to $24 billion by 2023. This is quite a feat for an industry worth less than a billion back in 2018.

What are CBD-friendly banks?

With the emergence of CBD, we have also seen the emergence of CBD-friendly banks.

Banks and other financial institutions didn’t want to do anything with CBD products for the longest time. There were several reasons for such a conservatism.

First of all, America didn’t have a sound legal system that would allow for rapid expansion of the industry. By itself, hemp products are pretty controversial, and until recently, most banks regarded them as high-risk.

There are also major legal and regulatory differences from state to state, making it really hard to sell and transport CBD across the US. This caused issues for CBD businesses as well. At one point, it was tough to get a loan if you’re a cannabis entrepreneur.

Even if you got one, you had to pay enormous interest. While marijuana dispensaries could deal with such a situation, online companies were much more complicated.

Luckily, things have changed a bit, and now, even some of the biggest US banks are prepared to take a chance with CBD companies.

10 best CBD-friendly banks to open a CBD business account

If you want to get a loan for your CBD business, you shouldn’t simply go with the first option that comes across.

Like with any other type of loan, you need to perform due diligence beforehand. Finding good loan terms can be tricky, but it isn’t impossible. Nowadays, some big names in the banking world are willing to offer loans to CBD companies.

This is a good sign, not only for you as an entrepreneur but also for the industry. It is a sign that things are slowly changing and that the cannabis business is becoming mainstream.

1. Chase Bank

If you thought that only smaller banks are willing to give you a loan, you should think again. Even the gigantic Chase Bank has started giving loans to CBD companies. Chase can meet all your demands as one of the best CBD-friendly banks to open a CBD business account in. Keep in mind that the institution still has certain reservations, but it is much more open to lending money than it was several years ago.

2. Silicon Valley Bank

If you’re looking for a proactive, forward-thinking, CBD-friendly bank, there aren’t much better than Silicon Valley Bank. This institution is always focused on innovation and technological development. This is precisely why they’re open to the idea of lending money to a CBD organization. According to Silicon Valley Bank, CBD products are regarded as wellness substances. As a result, they’re willing to offer the same service to CBD companies as they would to healthcare providers. Another good reason why you should open a CBD business account in Silicon Valley Bank is that they publish regular reports, which the government then uses to improve their clients’ needs.

3. North Bay Credit Union

North Bay Credit Union is another reputable bank to open a CBD business account on our list of CBD-friendly banks. They have been openly handling CBD transactions for a while, and they’re really proud of that. The company limits the size of deposits available to CBD companies. That way, they’re managing their capital ratios. Although these transactions are still regarded as illegal, North Bay Credit Union is willing to take the risk. So far, they haven’t been penalized by the Federal Law, so there is a good chance they will continue providing the same quality service.

4. Bank of the West

Bank of the West is renowned for its numerous offers. They have home loans, car loans, RV loans, and countless other products. Among others, they support the cannabis business by providing entrepreneurs with a fresh fiscal stimulus. An interesting thing about this institution is that they donate 1% of all their earnings for protecting the environment. As you well know, most hemp entrepreneurs are environmentally conscious so, this looks like a match made in heaven.

5. West Town

This is probably one of the banks that is most dedicated to the hemp business. The company has a special program focused on cannabis entrepreneurs. You will get the same services as if you were a regular business. West Town relies on its innovative platform to create actionable solutions for cannabis businesses. By utilizing data analysis, they can provide the optimal plan for your business, all according to the current cannabis regulation.

6. Home Bank of Arkansas

As one of the biggest financial institutions in this state, it isn’t surprising that Home Bank of Arkansas is willing to help hemp entrepreneurs. They are one of the oldest banks in the state, dating back to 1908. Furthermore, they are the only bank in Arkansas willing to cooperate with this industry. According to the company representatives, it is their responsibility to provide guidance and financial support to medical hemp users and companies. They also wish to spearhead financial education to help cannabis businesses located in this state.

7. Patelco Credit Union

Patelco Credit Union is a financial institution that has provided services to the Bay Area in the last 80 years. This is a member-owned, not-for-profit bank, which makes sense Patelco would like to cooperate with cannabis businesses. The company wants to help its clients achieve 5 goals: lower their debt, plan for the future, buy a home, increase savings, and manage retirement. If you wish to apply for a cannabis business loan, they are one of the best options within the state of California.

8. PenFed Credit Union

PenFed Credit Union is a financial institution that serves Virginia and North Carolina. It helps customers by providing affordable loans and can also help them when buying cars and homes. Among others, they have a great refinancing program that anyone can utilize. When talking about the cannabis industry, in particular, they cooperate with numerous businesses by providing them financial assistance and financial education.

9. Keystone Bank

Keystone Bank prides itself on its ability to help others. They have streamlined most of their processes, allowing you to open a new account in their bank relatively quickly. In addition, the company can help you manage daily transactions, build a safety net for emergencies, analyze your daily activities and provide feedback, help control company cash inflow and outflow, and provide loans for businesses. Having all this in mind, a cannabis company can benefit a lot by utilizing its resources and expertise.

10. Oklahoma State Bank

As one of the biggest financial institutions within the state, Oklahoma State Bank deals with all sorts of businesses. Among others, they provide loans and other support for cannabis organizations. In addition, they will help pay your vendors and deliver employee payrolls directly to their respective banks. The bank also has the latest software to monitor the latest cannabis regulatory changes and adapt its financing strategies accordingly.

The best 4 ways to finance your hemp company

Of course, banking loans are just one of several ways you can utilize them to finance a CBD business. In practice, the majority of companies rely on a few financing sources. This is really good as it provides certain flexibility.

Here are the 4 leading alternatives to traditional company loans:

1. Financing by a private investor

Private financing is a great way to get your marijuana business off the ground. You don’t need a wealthy cousin to get that initial cash inflow to make things even better. Nowadays, you can simply check the AngelList and connect with a potential private investor. You wouldn’t believe how many people are interested in CBD startups! All you need is a good business plan, and you can find a great angel investor for your project. Keep in mind that most of them will want a part of your company in return. However, if you’re struggling to get cash, this can still be a fantastic alternative.

2. Financing from personal sources

Most of us have some savings. These savings can be enough to start a marijuana business in some cases. Many companies were launched with minimal cash but with a good idea. If you also have a good idea, your CBD company can go places without spending a dime (or at least, with minimal personal investment). Even if you don’t have any savings, you can create a plan that would allow you to put some money aside. We tend to spend too much money on various trinkets, which is why we’re never able to put anything in the bank. You can also consult a financial advisor who can help you make a savings plan. If you’re disciplined enough, you can make a big enough cushion to start your CBD project.

3. Reducing your expenses

Now, this isn’t a financing method per se, but it is an excellent way to regulate your expenses and get out of a financial rut. Most companies go overboard with their initial expenses. They will invest heavily in CBD products, creating a too big inventory for their particular needs. Instead of going big, try going small. A lot of companies don’t even need that initial influx of cash; they just need to manage their expenses a bit better. Even if we’re talking about marketing expenses, you can try and limit them as much as possible, that is until you can afford something more than the basic ads.

4. Personal hemp loan

You need to remember that you don’t actually need a company loan for your marijuana business. Instead, you can simply take out a personal loan. As long as you have a good credit rating and proof of income, most credit institutions will give you a cash loan without much fuss. This is a perfect workaround, both for you and the bank. Still, you shouldn’t take a personal loan if you’re not 100% sure that your CBD business has a future. For example, you might need to put collateral for this loan, which can endanger your family’s future. While some financial experts regard personal loans as a high-risk approach, you can still pull it off if you do it properly.

The future of CBD-friendly bank loans

Even though things look a bit shaky, CBD loans will definitely become more readily available as time goes by.

The most important thing to keep in mind is that most governments are doing their best to legalize and regulate the substance.

Cannabinoid products have significant medical potential, and it would be a real shame to neglect them.

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