Requirements and Costs

Cannabis Loan Requirements, Rates and Fees: What to Expect

Rates get the headline. Fees and prepayment terms decide what you actually pay. Read the whole term sheet.

Updated October 202610 min readMeridian Private Line Editorial Team
Overhead view of financial statements, tax forms and a license folder spread on a desk

By the Meridian Private Line editorial team · Sources are listed below.

About this page: This is an informational overview built from public sources. Editors checked the cited sources. We have access to 75 lenders. Confirm details with the lender that best fits your situation.

Affiliate Disclosure: This site may earn compensation if you request a lender introduction. That does not change your terms. Full disclosure.

The short answer

Lenders ask for your license, bank statements, tax returns and ownership details. Costs include interest, an origination fee and closing costs.

Add them together. Use the calculator to see the APR once fees are counted.

On this page

  1. Minimum revenue and credit by product
  2. What a public cannabis lender reports
  3. Typical rates and fees
  4. Application package checklist
  5. Underwriting criteria and term sheets
  6. Pre-qualification checklist
  7. Hidden costs
  8. A worked example: a $500,000 term loan
  9. How lenders weigh risk
  10. Terms to know
  11. Frequently asked questions

Minimum revenue and credit by product

Each product has a different gate. A real estate loan checks the property first. A working capital loan checks sales first.

ProductLender checks firstTypical document
Real estate loanProperty value and your equityAppraisal and lease
Working capitalMonthly depositsTwelve months of statements
Equipment loanAsset valueVendor quote
Receivables financingBuyer qualityInvoices and manifests

What a public cannabis lender reports

Chicago Atlantic Real Estate Finance lends to cannabis operators and files with the SEC. Its fiscal 2025 10-K reports a weighted average loan yield to maturity of 16.3 percent.

Individual loans ranged from 9.7 to 26.9 percent. The weighted average maturity was 2.2 years.

That is the lender's return, including fees. It is not the rate on any one borrower's note.

Use it as a range finder. If a quote lands far outside it, ask why. The filing cites significant prepayment protections, so ask about prepayment terms.

For standard lines, see line of credit requirements and fees explained.

Typical rates and fees

Rates vary with collateral, term and risk. Lenders set their own prices, so averages mislead.

Quotes change fast. Collect at least three in the same week so you compare like with like.

The cost stack on a term sheetThe cost stack on a term sheetPrincipal: what you receiveInterest: the quoted rateOrigination: paid at closingClosing costs: legal, appraisal, filingExit terms: prepayment or exit fee
Every layer adds to the real cost. Ask for each one in writing.

True Cost of a Loan Calculator

Turn a quoted rate and fees into one honest number.

How to use this: Enter the term sheet figures. The tool shows payment, total interest, fees and an APR that includes the fees.

Monthly payment
Total interest
Total fees
APR including fees

Application package checklist

Entity and license

Formation papers, license certificate.

Financials

Twelve months of statements and tax returns.

Ownership

Everyone with 5 percent or more.

Use of funds

A plain budget for the money.

A complete package shortens review. Missing pieces restart the clock.

Underwriting criteria and term sheets

Underwriters read for repayment capacity and compliance. They flag unusual cash patterns.

A term sheet is not a commitment. It lists the conditions the lender still needs to clear.

  • Read the conditions precedent to closing.
  • Check every date and deadline.
  • Look for cross-default and material adverse change clauses.

Pre-qualification checklist

  • Active license in your name.
  • Books reconciled monthly.
  • Taxes filed and current.
  • Clear use of funds.
  • Collateral identified.
  • Guarantor ready to sign.

If all six are true, you are ready to shop.

Hidden costs

Prepayment penalties, minimum interest guarantees and monthly servicing fees often hide in the fine print.

Ask what happens if you pay off early. The answer can change which offer wins.

Quote it back. Ask the lender to state the total payment over the full term. If they will not, move on.

A worked example: a $500,000 term loan

These numbers are an illustration. They match the calculator above.

The loan is $500,000 at 13 percent over 60 months. The origination fee is 2 percent, or $10,000. Closing costs add $7,500.

The monthly payment is about $11,377. Total interest is about $182,600. Fees total $17,500.

Once fees are counted, the APR is about 14.6 percent. The stated rate was 13.

ItemAmount
Monthly paymentAbout $11,377
Total interestAbout $182,600
Fees$17,500
APR with feesAbout 14.6%

How lenders weigh risk

Lenders look at how much of the loan the collateral covers. They look at how well your cash flow covers the payment.

They also weigh the strength of your license and your compliance record.

Strong results in one area can offset weakness in another. A high-value property can offset thin cash flow.

Terms to know

TermPlain meaning
Origination feeA fee charged to create the loan.
Loan-to-valueThe loan as a share of the collateral's value.
Debt service coverageCash flow divided by loan payments.
Prepayment penaltyA fee for paying off early.
Condition precedentA requirement that must be met before closing.
Personal guaranteeAn owner's promise to repay.

Frequently Asked Questions

Expect license papers, bank or processor statements, tax returns, entity records and an ownership list. Real estate deals add leases, appraisals and environmental reports.
Lenders set their own floors. Ask for it in writing. Strong sales can offset weaker personal credit with some products.
Origination fees, legal and closing costs, appraisal fees and sometimes exit fees or prepayment penalties. Ask for a full fee schedule.
Many private lenders ask for one. Some negotiate limits on it. Read what it covers.
Often yes, especially on larger deals or with competing quotes. Ask early.
How the figures work: Figures with a link come from the source named. Everything else is an illustration built on numbers you enter.

Sources and further reading

Not financial or legal advice. Figures in the calculators are illustrations built from numbers you enter. Cannabis remains federally restricted. Lender appetite and state rules change often. Confirm current terms with a licensed professional before you sign.