Tanning Equipment Financing

There are several ways to get funding to add tanning equipment to your salon.  One way is to pay cash, get a loan from a bank, or lease tanning beds directly from the manufacture.

Method 1 : Leasing

• A 10% buyout
• A $1 buyout lease

The 10% buyout – After determining what length of lease you want ,  36 , 48 ,or 60 months your monthly payment is calculated and at the end of the lease you owe 10% of the original tanning booths value.

The $1.00 buyout – Once again you determine the length of lease, but this time your monthly payments are higher, but you only owe $1 at the end of the lease.

The end result of both options is the same, but the cash flow of each differs.  If you have a cash flow problem at the beginning of the lease then the 10% buyout may be the better choice since it will have lower monthly payments.  If your cash flow situation is fine it is probably more advisable to go with the $1 buyout plan as you will not have to save money up to pay the 10% lump sum due at the end of the lease.

Leasing tanning equipment allows you to finance your tanning booths over a long period of time.  It will help you to maintain healthy cash reserves and working capital to deal with the other aspects of your business like marketing and day to day operations.  It also allows you to essentially have your customers pay for your new equipment, as the new revenue it generates can cover the monthly payments.   If you were to save up all the money in order to pay cash for equipment it may take you a year to buy it outright, whereas if you used a method of tanning bed leasing you would have been able to afford the equipment.

Financing tanning booths can also be beneficial tax-wise, as you can write off the lease payments as expenses and keep your taxable profits low.