Illinois is offering a total of $8.75 million in forgivable loans to conditionally approved social equity marijuana licensees “in order to provide immediate access to capital” after challenges with a previous loan program.
“Pending the completion of a simplified documentation process, forgivable loan amounts between $50,000-$500,000 will be released immediately,” according to a Thursday news release from Illinois Gov. JB Pritzker and the state Department of Commerce and Economic Opportunity.
Under the state’s Cannabis Social Equity Loan Program, craft growers are eligible for loans of $500,000, infusers can apply for $250,000 and transporters can apply for $50,000.
The loans have “an 18-month grace period with no payments or interest accrued to provide businesses with flexibility” but will carry a 4% interest rate after that.
The new loan program comes after difficulties with Illinois’ original social equity loan program, which launched in 2021 in partnership with private lenders.
“Program participants have encountered significant delays in receiving capital through financial institutions due to the complexities of navigating a new industry that remains illegal under federal law” and other factors, the release noted.
Loans to social equity licensees under the original program were not guaranteed and were not forgivable.
In contrast, the state said the new forgivable loan program will give funding to “every participant that completes the simplified documentation process and funding disbursement steps.”
“Interested participants can continue to pursue funding through the original loan program, while also receiving the new direct forgivable loan,” according to the release.
The principal of the loan “is 100% forgivable.”
According to the release, forgiveness “will be provided to recipients upon receiving documentation of a broad array of eligible expenses currently accrued or accrued during the loan period, including rent, payroll, utilities, inventory, debt, regulatory expenses, legal fees, equipment and much more.”