[helpinghand]

Clean cannabis deal here ($800k/mo. august and sept., $1M nov. / dec., healthy balances) but one technical issue:
Company is venture backed so applicant only owns 25% but is fully authorized to secure a loan.
Which lenders a) fund cannabis AND b) will put out an offer to a minority owner?
Collectively he and his brother own 48% and 2 other founders put them over the majority.

Thank you in advance

[Kevin Henry-Seacoast]

Hi Helping Hand,

We can't touch the stuff as we are a division of a bank, but I will offer some friendly advice. Get a copy of their operating agreement with their equity sponsor. Regardless if they have majority shareholder control, they may not be able to get any funding without the sponsor's approval.

Always back-up what someone said with a document that proves it!

Best,

KH

[Jstarr]

Try Steven From Davinci - 210-290-4102

[WestCoastFunding]

Hi Helping Hand,

We can't touch the stuff

As he takes a rip from a bong

[Kevin Henry-Seacoast]

As he takes a rip from a bong

I randomly pee in cups and sometime when I am not being tested for pot. Note to self: If you ever go out for drinks with me....take your drink with you if you leave the bar.

[AllDayMoney]

If they have a notarized letter saying that they have power of attorney then we can do that

[Kevin Henry-Seacoast]

If they have a notarized letter saying that they have power of attorney then we can do that

No you can't....

[Anthony@torro]

Hanna, If there is notarized documentation that the 2 brothers are authorized by the board to make financial decisions we can give a VERY aggressive offer on this deal. I just funded a cannabis deal earlier this month for 750k with a similar ownership situation. Feel free to reach out if I can be of any help here.

[Kevin Henry-Seacoast]

No you can't....

[Anthony@torro]

No you can't....

Wanna bet?

[Kevin Henry-Seacoast]

Guys-If a Company is sponsor backed by a family office, VC, or private equity fund you will need to review the operating agreement to determine if management has authorization to make financing decisions without shareholder approval. The operating agreement trumps any PA that is notarized. If someone granted a PA they would have had to change the operating agreement.

KH

[Kevin Henry-Seacoast]

Wanna bet?

With all due respect Anthony....I don't think you wanna place bets here. What you should be doing is going back and asking for the operating agreement for the company you just funded to make sure it was changed to reflect the PA. Otherwise....your PA might be worthless......

[Anthony@torro]

With all due respect Anthony....I don't think you wanna place bets here. What you should be doing is going back and asking for the operating agreement for the company you just funded to make sure it was changed to reflect the PA. Otherwise....your PA might be worthless......

It was a 3rd time renewal, we have the operating agreement as well. I didn't want to stip him to death on a daily funder post. Hanna and I have worked together for some time now, if he decided to get the file over to me then him and I would have figured out exactly what was needed to get this funded.

[helpinghand]

Kevin, I understand all of your points but i'm just looking for a funder that will put out an offer to a minority owner. About 18 months ago or so all the funders in the industry started requiring majority owner to apply. That is ridiculous because their offers are contingent anyway. There is no legal implication to putting out a conditional offer to a minority owner, whether they're authorized or not. That may or may not be free to seek offers, but what's it to a lender if they're conditioning the offer anyway? The offer can be further conditioned on a statement by the applicant saying they are hereby authorized to do apply, absolving risk to the funder.

I would impress it upon legal counsel for all these MCA companies to seriously look into this. It will help brokers out, reduce the burden on clients, and increase deal flow for funders.

[Kevin Henry-Seacoast]

It was a 3rd time renewal, we have the operating agreement as well. I didn't want to stip him to death on a daily funder post. Hanna and I have worked together for some time now, if he decided to get the file over to me then him and I would have figured out exactly what was needed to get this funded.

You can do what you want as it's your money. I ask for necessary documents every time money goes through the door .....I don't care how long they have been a client.

A finance Company in the South East was just taken for $1.7Mil by a client who has been with them for over 5 years. The documents were not buttoned-up.

[Kevin Henry-Seacoast]

Kevin, I understand all of your points but i'm just looking for a funder that will put out an offer to a minority owner. About 18 months ago or so all the funders in the industry started requiring majority owner to apply. That is ridiculous because their offers are contingent anyway. There is no legal implication to putting out a conditional offer to a minority owner, whether they're authorized or not. That may or may not be free to seek offers, but what's it to a lender if they're conditioning the offer anyway? The offer can be further conditioned on a statement by the applicant saying they are hereby authorized to do apply, absolving risk to the funder.

I would impress it upon legal counsel for all these MCA companies to seriously look into this. It will help brokers out, reduce the burden on clients, and increase deal flow for funders.

Helpinghand..... Having the right documents in place to fund a transaction closes deal. Not having the right documents to collect term sheets wastes time. Getting the right information upfront every time not only ensures certainty to close, but also speeds up the process.

[Bloomingdale Funding]

As long as a k1 or the canibus board document the brothers as majority thats when a funding company should fund.

Yellowstone funds anyone. Thats why they made bloomberg news.

[MrBizWiz]

He only needs to show atleast 5%. Will need a k-1 or tax returns showing his name and business name.