Vape Shop Loans & E-Cig Store Financing

Financing For Vape and E-Cigarette Shops

Society has become in a level. Generation X'ers and Millennials are fighting non-stop to enhance the quality of living in the world and environment. We're beginning to focus more and more around the impacts that pollution, big agricultural businesses, oil companies, fracking companies, and so much more are having on our environment. Due to the rising concern of health and environmental impacts of traditional tobacco smoking, it comes as no surprise the vaping and electronic cigarette, or e-cigs, industry has consistently grown forever. As the topic of positive health impacts of vaping and e-cigarettes continue to be somewhat taboo and controversial, it is important to take a look at what we can say for certain from the data and research that's been conducted to date.

What the Facts Say

There is no 100% absolute proof that long-term smokers will stop smoking if they transition into the world of electric cigarettes and vaping, nor any definitive studies yet that outline the true health and environmental impacts of utilizing these no-traditional ways of smoking. However, there are quite a few studies that demonstrate the starts of a healthier alternative in the tobacco industry that does appear to help some people quit smoking traditional cigarettes. Lead author Dr. Leonie Brose, who published a study that researched E-cigarette use within December 2012, demonstrated that 65% of those that were using an e-cigarette on a daily basis were able to attempt to quit smoking within the first year of use, as well as 14% of case studies having drastically reduced their intake of tobacco. Dr. Leonie Brose claims that, “This study did not test how helpful they are as quitting aids because we looked at smokers who have been suing them for any reason, including just to reduce their smoking or perhaps in situations once they cannot smoke. But it's encouraging to see that even so, regular e-cigarette use was associated with reduced numbers of lethal cigarettes smoked and increased tries to stop smoking in the following year.”

Similarly, other studies have shown that while we may not know all of the damaging negative effects, if any, of vaping and electric cigarettes, we all do know that they're nowhere near as dangerous or toxic towards the person smoking and those around them as traditional tobacco cigarettes. First and foremost, we must remember that it is not the nicotine in cigarettes that kill people, it is only the addictive agent within the product. Vaping liquid, or vape “juice”, only has nicotine inside it, not tobacco. Multiple other studies have shown advantages of e-cigarettes may outweigh harm many positive effects of transitioning from traditional cigarettes to electronic vape pens; additionally they show that it's incredibly rare for a non-smoker to begin vaping. Based on the study researcher Thomas Eissenberg, who is even the co-director from the Center for that Study of Cigarettes and tobacco products at Virginia Commonwealth University, “Current evidence shows that there's a possibility of smokers to reduce their health risks if electric cigarettes are used in place of tobacco cigarettes and are considered one step toward ending all tobacco and nicotine use.” The senior author, Dr. Hayden McRobbie in the Wolfson Institute of Preventive Medicine, added that, “If there are any risks, these will be numerous times lower than the risks of smoking tobacco- If there is evidence that e-cigarettes reduce smoking-related harm, then they have to be easily accessible and not regulated more strongly than cigarettes and tobacco products.”

E-Cig and Vape Regulation

Regulation of vaping and electronic cigarettes is a controversial topic recently, because of the newly released FDA regulations. Many vape store business owners are involved about the potential impacts of those new regulations released in May 2020, especially because it is shown that these new regulations are more hazardous than ideal for customers. For instance, current vape shops can no longer add or create services, for example vape liquids that are account for over 60% of sales in vape stores; this includes prohibiting safety improvements which may be essential for certain products, including battery modifications. Essentially, “the FDA is freezing all defective batteries, impure e-liquids, and overheating coils, preventing companies from address these impending safety hazards.” These regulations have unfortunately stifled a vaping company's capability to innovate and create new products that may only improve the quality of products and continue to reduce health problems to even lower levels. These regulations are turning out to be bothersome for most companies, however most vaping and electronic cigarette businesses are finding ways around these regulations to carry on to thrive.

Industry Trends

Even with these new pesky regulations, industry trends are showing that vaping and electronic cigarette stores, in addition to their products, are a booming industry that is continuing to develop at an exponential rate. Current research has shown that the global electronic cigarette and vaping industry are experiencing a growth of over 22.36% from 2020 to 2025, resulting in a total market value of over 50 billion dollars by 2025. These growing industry trends are also reflected in the amount of people who've stopped smoking traditional tobacco cigarettes. New York City, one of the most populated cities in the usa, has majorly reduced their consumption of tobacco cigarettes. Ny City's Health Department conducted research that showed over fifty percent a million people now use electronic cigarettes and vape pens rather than traditional cigarettes. This is quite an amazing feat taking into consideration the large role traditional cigarettes have played in society for many generations. The amount of vape shops are only increasing, resulting in over 6,000 specifically vaping shops, and also over 35,000 stores that sell other products in conjunction with vaping and ecigarette products.

Reasons a Vape Shop Could Need Financing

With this incredibly competitive and quickly growing industry, it is important for vape and electronic cigarette business people to know about their financing options; especially as these new regulations happen to be released and may hinder business for a period of time until everything adjusts towards the new rules!

Vape Shop Loan Comparison

Types Rates Terms Funding
Bank 6-10% 3-7 years 14-30 days
Line of Credit 5-15% 1 – 3 years 7-30 days
Alternative 6-25% 1-5 years 5-7 days
Cash Advance 1.16-1.55 3-24 months 1-3 days

Vape Shop Bank Loans

While they're extremely tough to obtain — especially in the vape store and smoke shop industry, bank term loans and lines-of-credit provide affordable funding for just about any small company. Rates start in the mid single digits, and terms extend up to Ten years, providing a vape store with healthy financing. With reduced rates comes more research, so an owner should expect to supply plenty of documentation.

Documents needed include:

Alternative Vape Shop Loans

Smoke shops and vape stores who're unable to obtain traditional financing should think about applying for a mid prime alternative loan. Institutional loans have rates which are higher than banks offer, but much more affordable than high-rate business loans and funds advances. Approval to have an alternative loan can be achieved within a few minutes, with funding in the matter of days.

Documents required for alternative lending:

Vape Shop Merchant Cash Advance

Merchant cash advances aren’t actually business “loans” in the traditional sense, but rather the sale of future credit card transactions to have an upfront sum of cash. A MCA lender will provide financing, then then collect a percentage of the vape stores daily charge card transactions until the loan is paid in full.

Documents needed for a merchant cash advance (MCA loan):

Vape Shop ACH Cash Advance

A business cash advance (ACH loan) may be the sale of future bank deposits to have an upfront amount of cash. A company cash loan lender will provide funding, and then collect a collection daily amount from the company’s banking account every day via ACH before the loan is fully-paid.

Documents required for a company cash advance (ACH loan):