Financing For Tanning Salons
With winter quickly approaching, there are many people in the United States being prepared for the standard indoor tanning sessions, because people need to become tan while bundled up in endless levels of layers! Appearance is everything in contemporary society, even among older, retired generations which have a lot of money to invest. The wonder industry is constantly growing due to the wide variety of necessities that individuals use today, ranging from hair, skin, and cosmetic care all the way to deodorants, antiperspirants, and dental hygiene products. In 2020 alone, the wonder industry generated over 56 billion dollars in the usa. The wonder industry has avoided economic downturns and it has essential shown to be recession-proof, even during 2008 when most business took a sizable hit financially. This industry continues to thrive, despite a lot of population being cautious about health insurance and environmental concerns. Incredible, if you ask me. Tanning salons particularly have noticed a small decrease in clientele because of increasing awareness about these issues, nevertheless the tanning salon business still earns an annual gross revenue of $187,500 annually.
The American Academy of Dermatology claims that 7.8 million women still tan indoors at tanning salons, with 70% of these women being Caucasian girls and ladies. Surprisingly, 1.9 million men also still use indoor tanning salons as well. Tanning salons are interesting simply because they cater to such a variety of regions; people want tanning salons in areas that have chilly winters, however geographical locations that allow people to wear more revealing clothes to demonstrate their tan's also demand tanning salons. The latter is why Florida has got the most salons; 7.8% of tanning salon establishments are throughout Florida!
Even though there keeps growing concern for health insurance and environmental concerns through the Usa, the tanning salon market is continuing to develop because of their integration of spray tan services in many locations. This concept caters to the health conscious clients who still crave that perfect California beach tan! According to a current survey ended through the US spa and salon sector which showed that spray tanning and body bronzing have become probably the most lucrative services in the tanning salon business. This has be apparent to entrepreneurs seeking to launch or invest in successful businesses, resulting in over 12,000 tanning salon businesses over the United States. While all the industry trends and statistics may seem intriguing, it is important to keep in mind that the tanning salon industry has a price – starting up a company such as this may begin with costs as much as $300,000.
Reasons and Uses For Tanning Salon Financing
If an entrepreneur makes it past this initial start-up phase, ongoing expenses will not be free, and that's why small tanning salon businesses looking to compete with the main tanning salon franchises have to be mindful of their financing options.
Comparing Tanning Salon Financing Options
|Bank||6-10%||3-7 years||14-30 days|
|SBA||6-10%||3-7 years||10-30 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|
|Equipment Lease||5-15%||1-10 years||7-10 days|
Tanning Salon Bank Loans
Bank term loans and lines-of-credit will always be the preferred choice for financing a tanning salon because they provide the best rates and lowest relation to all small company loans. But in to qualify a salon owner must have excellent credit and the business must have past profitability. The process of securing a tanning salon loan through a traditional bank takes between weeks to months.
Documents needed include:
SBA Tanning Salon Loans
SBA loans are an excellent small business financing choice for tanning salon owners who wish to secure bank-rate financing, but don’t quite meet a banks’ credit or cash-flow criteria. SBA tanning salon loans aren’t loans by the government, but instead are a guarantee through the Sba to pay for lenders’ losses should borrowers default on their own loans. SBA financing for salons could be exhaustive, with the time-frame for funding taking between 10-60 days.
Documents needed for SBA tanning salon financing:
Alternative Tanning Salon Loans
If a tanning salon doesn’t satisfy the credit or cash-flow (profitability) criteria of traditional and SBA lenders, and option would be to seek alternative tanning salon financing. Alternative online lenders have a lower credit criteria, and generally don’t require the collateral required by traditional lenders. Alternative loans take just minutes to pre-qualify, and around a week to fund.
Documents required for alternative tanning salon lending:
Tanning Salon Asset Based Lending
Asset based business loans are a good way for tanning salon owners who personal or commercial real estate to make use of their home as collateral for any business loan. A good thing based lender can offer loans in a 1st, 2nd or perhaps third position having a loan-to-value between 25-75%.
Documents required for asset based tanning salon lending:
Tanning Salon Equipment Financing
Equipment leasing a way for tanning salon proprietors to lease brand new or used equipment without the full-cost of the equipment upfront. The tanning salon need just offer an application, bank statement and vendor quote, and a lender will purchase the equipment and then lease it to the salon. The procedure takes anywhere from a couple of days to a few weeks.
Documents required for equipment leasing:
Tanning Salon Merchant Cash Advance
Merchant payday loans aren't business loans, however the sale of future receivables in exchange for an upfront payment of cash. Payday loans are available in both ACH and MCA loans. ACH loans are payday loans that are repaid daily by remitting a set fee every day as repayment to the lender. MCA loans are when a number of a tanning salon’s credit card processing statements each day.