One of the most successful industries now is vaping. By 2023, the industry is expected to reach $48 billion. So, it’s not surprising if you’re considering starting a vape juice business. Your finances should be the priority when you plan your business.
There are many options for small businesses, but business loans remain the most popular. How do you get a business loan? Continue reading to find out.
You need to determine your business expenses before you sign up for a loan. You need to decide if you’ll have a physical or online store.
Compared to an online store, you’ll have to spend more in a physical store. Some of the common business costs are utilities, licenses, permits, equipment, marketing, employees, and market research among many others.
Vape-specific costs should also be considered. However, this will vary depending on the type of vape business you have. For instance, you’ll have different expenses with a vape store retailer compared to if you plan to manufacture e-juice or vape pens.
Determining the Type of Business Loan You Need
Many loans can be advantageous to your vape business. Here are some of the business loans you can consider:
Business Term Loan
This is the most popular traditional business loan. You can loan from $1,000 to $500,000. Depending on the lender, collateral isn’t needed. You can pay these loans off for 1 to 5 years. But some lenders have shorter and longer paying periods.
The interest rates can be between 7% and 30%. Your lender will base this on the credit score of your business, current financial status, and monthly revenue.
Luck is needed to be able to avail of a loan from SBA or the USA Small Business Administration for a vape business. You can borrow from $5,000 to $5 million. This is a great loan because of the low-interest rates.
There’s also a long repayment period, and you don’t have to give any collateral or particular purpose. But the problem with this is that it may take a long time to process your application and receive money.
You can consider this business if you need money for your supplies or equipment. It has a usually low APR which is between 8% and 30%. You can opt for this if your business has no or a bad credit score. The loan period is often about 5 years or longer as long as you have the equipment.
Most small businesses also choose this business loan because the amount of capital received is good but it’s also not strict on collateral, regulations, and repayment.
But this is recommended only if your business has been around for a while and is not generating a lot of revenue. That’s because lenders won’t grant a loan if your business is less than 2 years old and barely has any revenue. Financial status is what lenders evaluate before approving a personal loan.