Can a hemp or CBD business get an SBA loan?
Short answer
A hemp business can, if the hemp meets the federal definition and any applicable state definition. CBD businesses are reviewed on source, products, health claims and legal compliance, and lenders must collect proof. Source: SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.
It can, with documentation. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E treats hemp and CBD differently from marijuana.
Hemp
A business that grows, produces, processes, distributes or sells hemp products is eligible only if the hemp meets two definitions. One is section 297A of the Agricultural Marketing Act of 1946. The other is any applicable state definition. The SOP notes that some states set a lower THC level than the federal definition.
The lender must obtain documentation that the hemp meets those definitions. If you grow, produce or process hemp, the lender also needs your testing protocols.
CBD
Eligibility turns on these factors, among others:
- Whether the CBD comes from hemp or marijuana.
- What is produced or sold, such as topical or ingested products.
- What health claims are made.
- Whether all products comply with federal, state and local law, including FDA rules.
The SOP cites FDA guidance on adding CBD. Under the Food, Drug, and Cosmetic Act, it is illegal to add it to any food or dietary supplement. The same applies to certain cosmetics.
Proof you will need
The lender must obtain documentation showing your CBD products comply with the law, including certificates of lab analysis.
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