When dealing with the purchase of spa and esthetics equipment you’re typically talking a few thousand dollars to 10s of thousands and in larger spaces, hundreds of thousands! For the spa owner this can be a huge capital outlay that if not properly considered can seriously impact your cash-flow and become a fatal flaw in the flow of your business. This is why it’s SO important to be strategic about your purchases.
So what strategies are available to you as a spa/esthetics business owner? Well there are a few different strategies to each, with pros and cons to each of course and so we’ll be looking at those today.
Pay by Cash
Option number one, is always paying with your cash reserves or accumulated capital. Assuming it’s available and it’s not going to prevent you from paying bills or ordering inventory that you need for the regular operations of your spa or skin care business. It’s true that in this case you can save a significant amount of money in the long run versus financing due to the interest costs, however you give up a lot of flexibility.
If you plan on financing your spa equipment by cash, it’s best to save up the additional capital required by taking a percentage of your sales every month and putting it aside until you can make the purchase.
Credit Card/Line of Credit
Option number two, your credit card or line of credit. This can be an interesting option but probably only for smaller spa equipment purchases. Paying for items on your credit card or line of credit does allow for a lot of added flexibility when you consider that you only have to make your minimum payments every month to keep the bank happy and you might be getting points as well. HOWEVER you need to watch out for those interest rates! It might be nice to put the bulk of the purchase off until later, however you don’t want to end up paying more than 7-8% interest (and that’s if your credit isn’t the greatest!). If you are interested in this method, you can use this tool to compare different credit cards in Canada.
Finally option number three is to lease the equipment. This one is often the recommended solution to financing your spa equipment as the interest rates are often the most reasonable, the payments more flexible and the contract is guaranteed to end. The downside though is that you are in a locked contract until the unit is paid. At Breizh we work with two leasing companies that help us provide spa equipment at affordable rates for even the biggest purchases. They are Westport Leasing and Leaselink.
If you are ever interested in making large spa equipment purchase and want to know what financing options you have available, or which one would work best for you, Breizh team members can work with you to determine which one best fits your budget.
If you have any questions, please email us at firstname.lastname@example.org!