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November 18, 2021

MedSpa Financing: How to Take Out and Use a Loan

Author

FF

Fora Financial

Staff

Tags

  • Medical Business Loans

  • Small Business Loans

Clearly, with the high margins of med spa businesses, there’s significant opportunity in this industry.  Although the pandemic impacted some med spa services, others have adapted and thrived. Once COVID-19 cases decreased in the U.S., demand for medspa services spiked.  Because of the pandemic, Devin Haman, CEO of Beverly Hills Rejuvenation Center, says more consumers started:
  • Placing a higher value on self-care.
  • Receiving employer-provided wellness benefits.
  • Feeling more stressed and seeking out relaxation.
Of course, outfitting a medspa requires a significant amount of capital. Therefore, it's crucial that you're intentional about how you spend your medspa loan. Before we explain how to use financing for a medspa, though, we’ll summarize common types of medspa financing.

5 Popular Options for Financing Your MedSpa

There's a wide array of med spa financing options for business owners to choose from. These options include:
  • SBA loans: The SBA offers financing to business owners that can't attain traditional funding.
  • Term loans from alternative lenders: If you want a loan with set terms and convenient monthly payment options, this is an ideal option.
  • Credit cards: There are many credit cards designed specifically for small business owners.
  • Equipment financing: If you need funding for equipment, you can secure an equipment loan.
  • Merchant cash advances: If your business accepts credit card payments, you may qualify for a cash advance.
The med spa financing option you select will depend on your particular funding needs. In addition, prior to seeking a loan, you'll need to consider factors such as:
  • The lender's overall offer
  • Interest rates
  • Payment plans
  • Credit score requirements

5 Ways to Use Financing for Your Med Spa

1. Purchase MedSpa Equipment

Whether you’re upgrading equipment, ordering pharmaceuticals, or investing in spa treatments, equipping your medspa is no small expense. Per Mindbody Business, the following equipment runs to about $30 per square foot:
  • Basic treatment tables
  • Facial machines
  • Technician chairs
  • Treatment trolleys
  • Lobby furniture
  • Office equipment
By taking out a med spa loan, you can invest in this equipment without hurting your business's bottom line.

2. Hire employees

The pandemic caused a massive shift in the job market and a reallocation of workers’ priorities. Hopefully, workers will keep returning to work, as they did in the November jobs report. However, even as workers return, compensation packages must be rethought to remain competitive in the labor market. Fortunately, you can use medspa financing to ease the cash flow burden of new employee benefits.

3. Start your medspa business

In most cases, it takes at least a few years for a new medspa to become profitable. Therefore, business loans can be a critical financing tool for medspa startups.

4. Invest in interior upgrades

A big reason medspas have increased in popularity is that they provide an escape. Beyond your expert treatments, the physical environment plays a primary role in helping your customers unwind. With medspa financing, you can cover everything from an entire office interior redesign or a few touch-ups and furniture upgrades.

5. Open a new business location

Another lucrative use of a medspa loan is to finance the acquisition of real estate. If you're existing location is thriving, consider taking out a loan to open a new location.

Conclusion: Make the Most of Your MedSpa Financing

To best utilize medspa financing, you must maximize your return on investment (ROI). Maximizing ROI requires using your funds for the project that generates the most possible revenue at the best possible margin. Unfortunately, without intimate knowledge of your business, no one can tell you the best use of your money. Hopefully, the ideas above give you a good starting point.