Connecticut has launched a new loan program to help qualifying marijuana social equity applicants as well as municipalities and nonprofits “rehabilitate, renovate, or develop unused or underused real property for use as a cannabis establishment.”
The program was announced this week by Connecticut’s Social Equity Council (SEC), which leads social equity initiatives within Connecticut’s adult-use marijuana market.
The Canna-Business Revolving Loan Fund program offers fixed-rate loans at prime plus 3%, with a 1.5% discount on the interest rate “for applicants that enroll and complete the SEC accelerator program,” according to a news release.
According to details posted online, the loans require a minimum equity investment of 20%.
Loan amortizations will be “over the life of the asset or the borrower’s ability to repay, with a maturity note of not more than 10 years.”
Working capital loans will have a two-year period, and lines of credit will mature after five years with an option to convert to a term loan of up to five years.
The program will not loan more than $500,000 for fixed assets, “including leasehold improvements,” or for vehicles. And it will not loan more than $200,000 for working capital and lines of credit.
The loans can’t be used for a number of purposes, including tax and license-fee payments or for “subsidizing a business that can obtain financing for the project at reasonable terms from conventional sources.”
Business owners may submit only one application even if they hold multiple licenses, according to a program FAQ.
The loan program is the most recent move by the state to aid Connecticut marijuana operators.
In June, officials said they would permit cannabis businesses to deduct expenses from state taxes.