Financing Your Tanning Bed: Is This The Best Route?

Owning your tanning bed is great if you have the money to buy it outright. But what if you want to start a business and need financial help? If you are a business owner that uses tanning beds, you will have to find a way to finance the purchase of this piece of equipment. There are four ways to finance a tanning bed: traditional bank financing; cash; leasing; and a SBA loan. Not everyone has a few thousand dollars to plop down on a tanning bed, and unless you have perfect credit, it's difficult to get a traditional bank loan.

Exposed: Leasing May Not Be Wise

When you research purchasing a tanning bed, you are going to cross paths with salespeople who will try to get you to lease the bed outright. They will give you a list of reasons why you should lease, all of them sounding great at the time. Upon reflection, though, you may discover that leasing a tanning bed is only in the salesperson's best interest. There are two types of leasing sources: a brokerage firm and a direct funding source, such as a bank. Going with a direct funding source is always better if you decide to lease simply because you will be working with a bank.

Salespeople are in it for one thing and one thing only: money. When you lease a tanning bed they get all the referral fees, they maintain control of the financing process, they can help get approval, and they basically rope you into purchasing from them. And that's not including the high interest rates you can expect to pay: 12 to 17% if you've been in business longer than two years, and 40% if you're brand new. Leasing is not financially feasible if you have the need to trade the bed in after a few years as you will only get pennies on the dollar, and some leasing companies will not allow you to pay off the lease or refinance the tanning bed.

Saving Money If You're Established

Leasing a tanning bed is not necessarily a bad thing if you have taken your financial situation into account. When is it financially sound to lease a tanning bed? When you are an established business that has been operating for two or more years. By leasing your equipment, they do not show up as a liability on your credit report, you are not required to produce collateral, your liquidity is maintained, and it is a great tax write off.

The different methods of financing your tanning bed should be looked upon in conjunction with the age of your business. If you are a new business, exhaust every financing option available to you before leasing a bed. You may be surprised to find that there are institutions out there willing to take on the risk of a new business and give you a loan. If you are an established business and understand the pros and cons of leasing your new bed, then this is a plausible financing option for you.