Tanning Equipment: Financing & Leasing Options (So You're Not Insanely Rich?)

Anyone in the indoor tanning industry knows that owning a tanning salon requires a huge investment. Some major expenses include rent—or mortgage payments—for the building, insurance, staff wages and utilities. But some of the most important (and most expensive) pieces of a tanning business are, of course, the equipment. Tanning equipment manufacturers and retailers will be out in full force at the ITA Tanning World Expo this September in Nashville, Tenn., as will the makers of equipment for hydrotherapy, sunless, light therapy and teeth whitening. And you can bet they will all be looking to convince you to invest in equipment upgrades or make a new purchase.

But before you launch into purchasing—or leasing—any of these profit-earning devices, be sure to thoroughly investigate all of your options when it comes to paying for them. Though the options can seem overwhelming, getting expert advice can save you frustration ... and a lot of money.

Ann Wiggins Noe, vice president of sales for the tanning division of Boulder, Colo.-based Highline Capital Corp., says for anyone thinking about buying or leasing new equipment, the first step is to have a practical plan for the business’ layout. Where will the potential equipment sit within the salon? Is there sufficient access to electricity? If you want to show off the equipment for marketing reasons, will it be displayed prominently or hidden in some corner or back room? (Note: If you don’t have room for the equipment, acquiring it makes little sense.) Having a layout plan in place allows salon owners to prioritize their wish lists and create an order for purchasing, based on what is practical and affordable.

Unless an owner spends thousands in cash—which is rare and not always the smartest way to buy, anyway—they have to borrow from someone to make purchases happen. “Debt managed properly can be an asset to you,” says Debbie Neumann, director of financing for Scottsdale, Ariz.-based Amerifund Leasing. “It not only helps to build your business credit rating, but it also can give you some very good tax benefits that you would not have had if you paid cash.”

Getting good rates depends heavily on a credit score, Noe says, which is a snapshot of your financial diligence. “Put bills on auto-pay so they aren’t late. If you somehow slip into a collections situation—personally, or in connection to the salon—take care of it. It can make a huge difference in the options you are offered and the rates you pay.”

If your credit isn’t the greatest, you still can qualify for a lease, Neumann explains. “There are many programs available, even for clients with prior bankruptcies. The rates will be slightly higher—but if your profits are more than your monthly payment, leasing may be the solution for you.”

The equipment is right, the price is fair and you’re strongly considering leasing options. Now, it’s time to work out the nitty-gritty. Noe warns, however, that picking the right leasing company requires a little bit of research. “Just because a sales rep suggests a certain company, it doesn’t mean they know that much about them or that they are necessarily the best deal for you. Ask around and get multiple bids,” she says.