High-Risk Business Lending Doesn’t Have to Be a Dead End

For many cannabis operators and other high-risk businesses, finding financing can feel harder than building the business itself.

Traditional banks often hesitate to lend, requirements seem to change from lender to lender, and business owners are left wondering whether they even qualify before they submit an application.

The reality is far different.

During a recent webinar hosted by Operational Security Solutions (OSS) and J&J Merchant Services, lending specialists broke down how financing actually works for high-risk industries and why many businesses have more options than they realize.

The biggest takeaway? Don’t assume you’re unqualified until you’ve had the conversation.

The Demand for High-Risk Business Lending Continues to Grow

Access to capital remains one of the largest challenges facing cannabis businesses.

Whether operators are opening a second location, purchasing equipment, improving cash flow, or simply preparing for future growth, financing is becoming an increasingly important part of running a successful business.

According to Tim Tofaute, Director of Operations and co-founder of OSS, the need is clear.

“About seven out of ten customers that we talked to found it very difficult to secure lending.”

Those businesses weren’t all looking for the same thing.

Approximately half were seeking working capital, while others needed equipment financing, lines of credit, or funding to expand into new markets.

High-risk Lending Difference – Including Legal Cannabis 

Unlike traditional industries, cannabis businesses face additional regulatory and banking challenges that make lending more complex.

Gabe Mendoza, Lending Specialist with J&J Merchant Services, explained that financing often comes down to relationships between lenders and the markets they serve.

“It really depends on state, which also kind of convolutes everything because not everybody wants to lend outside of their market.”

The good news is that specialized lending partners understand these challenges and work with multiple financial institutions to match businesses with the right financing programs instead of relying on a single lender.

What Types of Business Financing Are Available?

One of the biggest misconceptions is that cannabis businesses only qualify for expensive merchant cash advances.

In reality, today’s lending landscape includes a variety of financing solutions depending on the business’s goals and qualifications, including:

• Working capital loans

• Business lines of credit

• Equipment financing

• Construction loans

• Term loans

• Merchant cash advances (MCAs)

• Personal credit-based business funding

• Business credit-based financing

Funding amounts can range from tens of thousands of dollars to several million dollars for well-established operators.

“We can get up to $5 million,” Mendoza explained, although he noted that most businesses typically fall between $50,000 and $500,000, depending on revenue, operating history and financial strength.

Documentation Matters More Than Many Business Owners Realize

One of the strongest themes throughout the webinar was preparation.

Businesses with organized financial records consistently receive more financing options and better pricing.

According to Mendoza:

“Documentation definitely means better rates.”

Lenders typically want to review:

• Two years of tax returns

• Business bank statements

• Merchant processing records

• Cash-in-transit reporting

• Business formation documents

• Credit history

The more complete the financial picture, the easier it becomes for lenders to understand the business and price risk appropriately.

Cash Businesses Have an Advantage—If They Can Document It

Many cannabis operators assume that operating primarily in cash hurts their chances of obtaining financing.

That’s only partially true.

Cash itself isn’t the problem.

Poor documentation is.

This is where companies like OSS create additional value beyond armored transportation.

Businesses using professional cash logistics and reporting systems can produce detailed deposit histories that help lenders verify revenue.

As Tofaute explained:

“Our online portal can give you on-demand reporting… you can download reports of exactly every deposit that you made into your bank.”

For lenders, consistent reporting builds confidence.

For business owners, it can lead to stronger financing opportunities.

Better Rates Aren’t Just About Credit Scores

While personal credit still plays a role, it isn’t the only factor lenders evaluate.

Time in business, consistent revenue, organized financial records and operational history all contribute to better loan terms.

Businesses that have been operating successfully for several years often receive significantly more competitive offers than newer operators.

Mendoza noted:

“If they have the time to really shop around at rates and have really good documentation, those are the ones that are going to see better rates.”

Even If You’re Not Ready Today, Start the Conversation

Perhaps the most valuable advice from the webinar wasn’t about interest rates or loan products.

It was about timing.

Many business owners wait until they desperately need capital before exploring financing.

That can be a mistake.

Mendoza encouraged businesses to begin the conversation early.

“We definitely take a consultative approach… Even if we can’t get you agreeable rates now, that doesn’t mean we can’t work with you to get you better rates in the future.”

Building a lending strategy today can position a business for significantly stronger financing options months down the road.

Financing Is About Building Long-Term Growth

Whether you’re purchasing equipment, expanding into a second location, improving cash flow, or simply preparing for your next phase of growth, access to capital shouldn’t be an afterthought.

At OSS, lending is part of a broader financial ecosystem designed specifically for high-risk businesses. Through trusted partnerships, OSS helps businesses navigate financing while also providing armored transportation, cash logistics, smart safe solutions, merchant processing, banking relationships and point-of-sale solutions that strengthen a company’s overall financial profile.

As Mendoza summarized:

“It’s worth having a conversation… Everybody’s different. We really like to get to know your business and help you build it.”

Ready to Explore Your Lending Options?

If you’re a cannabis operator or another high-risk business looking for working capital, equipment financing, a line of credit, expansion funding or simply want to understand what financing options may be available, the team at Operational Security Solutions can help.

Our consultative approach means we’ll take the time to understand your business, evaluate your current financial profile and connect you with lending solutions designed for your unique needs.

Contact OSS today to schedule a confidential lending consultation and discover how the right financing strategy can help your business grow.