Small Business Loans
KOLA offers a wide variety of financing options depending on what your business requires. Although our primary investment goal involves equity funding, we also provide Short-Term loans from 1-3 years, Asset-Based lending, and Equipment Financing.
Our clients come from all segments of the cannabis industry including:
- Testing Labs
- Analytics and Software Services
- B2B Companies (perform manufacturing and cultivation services for third parties)
- Ancillary Product Suppliers
- Agritech, Pharmaceutical and Phyto-Biological research and development of new therapeutic drugs and treatment
- Retail Dispensaries
- Cultivation, Manufacturing, and Processing
- Packaging, Branding, and Marketing
- Edibles and Infused Product Manufacturers
KOLA’s review of your eligibility for financing initially includes the “5 C’s” of lending – Credit Score, Character, Capacity to Repay, Cash Flow and Collateral. However, unlike traditional lenders, we don’t consider each “C” equally meaning a strong management team with good character and a unique product can more than make up for the lack of cash flow or collateral.
At a minimum, entrepreneurs seeking funding should maintain a strong credit rating, keep good financial records and do things honestly and ethically in all aspects of your business practice. If this sounds like your company, contact us to discuss the next step in our business partnership.
Equity Funding
Equity funding is our preferred investment option as it allows KOLA to share its business and industry expertise with our clients to create a strong team and increased revenues for our partners. Because we expect to work together with our clients for many years, it’s important to make sure that the relationship will work for both sides.
As a result, equity funding requires a more formal proposal and detailed information generally not required for traditional forms of financing. We want to learn as much as possible about the management team, your product or service, market size, competition and what sets your company apart. Once we decide to work together, KOLA will remain in your corner as a valuable team member and critical resource for future consulting and financing needs.
Additional investment criteria we may consider for equity funding includes some or all of the following:
- Experience and Maturity of Your Management Team
- Scalable Business Model
- Intellectual Property Rights
- Reasonable Valuations and Projections
- Planned Use of Funds
- Clear Path to Cash Flow
- Exit Strategy/Path to Monetization for Owners
- Competitive Advantage in the Industry
- Unique Products, Services or Methods
Asset Based Loans & Short Term Funding
In addition to equity funding, KOLA provides asset-based financing and short-term loans to eligible companies as well as convertible note agreements which convert debt to company ownership at KOLA’s discretion.
Asset-based loans can be secured by commercial real estate, equipment or other assets of value. If this is the financing you’re looking for, tell us how you’ll spend the money and be sure to have organized financials including credit score, balance sheet and recent valuations for any assets that can be used as collateral.
KOLA also provides short-term unsecured loans from 1-3 years to highly qualified companies who do or provide something unique for the industry and require temporary financing for implementation of a segment of their business plan. For this type of loan, the “5 C’s” become even more important so expect to provide detailed background information for each member of the management team.
Although the fees and interest rate for this kind of loan are higher than many financing options, it may be the best plan if you’re confident in the company’s ability to quickly pay off the loan. This is also a good scenario to consider convertible note options which allows KOLA to convert all or a portion of the debt into an ownership interest thereby relieving your company of most financing costs.
Equipment Financing
If you need to purchase a major piece of equipment or machinery for your business, KOLA can help by providing equipment loans or lease financing options.
The benefits of leasing equipment from KOLA are significant:
- Get the equipment ASAP without huge upfront costs
- Free up working capital for other matters
- Maximize tax benefits by the ability to deduct appreciation and interest payments on the lease
Possible lease alternatives include:
- Option to purchase the equipment at end of the lease
- Step-up leases with payments increasing over time as your business grows
- Deferred leases allowing you to skip payments during certain slow months of the year
- Master lease agreements that let you add additional equipment and financing to the original lease
Alternative equipment financing options include equipment and machinery loans that allow your company to purchase the equipment and have full control of the equipment both during the lease period and once the loan is paid back.