How to Finance an Electric RAYS Tanning & Spa Franchise: Sunbeds
By Marc Cornella
An Electric RAYS Tanning & Spa franchise loan pays for a salon that earns its revenue from tanning sessions and wellness services rather than from food or retail goods. Most of the money goes into sunbeds, spray tan equipment, spa units and a finished storefront, which makes this an equipment-driven deal where the useful life of the beds and the salon’s client base matter as much as the build-out.
This article covers the concept, the costs to confirm in the disclosure document, the brand’s SBA Franchise Directory listing and its two notes, and the financing tools that fit a tanning and spa salon.
US Professional Funding is not affiliated with, sponsored by or endorsed by Electric RAYS Tanning & Spa; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs differ by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Electric RAYS Tanning & Spa Franchise Loan at a Glance
- Concept: a walk-in tanning salon offering UV sunbeds at several intensity levels, spray tanning and spa-style wellness services.
- Wellness services: red light therapy, hydromassage and infrared sauna, according to the brand’s own listings.
- Home market: a regional brand with several salons in Idaho.
- Costs: the franchise fee, royalty and total investment appear in Items 5, 6 and 7 of the current disclosure document; we could not verify current figures.
- SBA Franchise Directory: listed under code S8521, with notes on the Lease Addendum and on lien position for collateral.
What Is Electric RAYS Tanning & Spa?
Electric RAYS is a tanning and wellness salon brand with locations across Idaho. Its salons offer UV tanning beds and booths at different intensity levels, spray tanning, and add-on services such as red light therapy, hydromassage and infrared sauna. The brand promotes a walk-in format with daily and monthly specials and no long-term contracts, and staff help clients choose services that fit their budget.
The brand is listed on the SBA Franchise Directory, which shows that its franchise agreement has been reviewed for SBA lending.
How lenders view a tanning salon. Lenders see tanning as a personal-care business with recurring visits, modest staffing and a heavy equipment component. They also know demand can be seasonal, peaking before spring and summer and around events, and that beds need lamp replacements and eventual upgrades. A no-contract pricing model means revenue depends on repeat visits rather than locked-in memberships, so lenders look closely at the location and local competition.
Electric RAYS Tanning & Spa Franchise Costs
Item 5 of the franchise disclosure document (FDD) gives the initial franchise fee, Item 6 the ongoing fees and Item 7 the estimated initial investment. We could not verify current figures, so the sections below describe what each cost covers.
Initial franchise fee. The fee pays for the license, training and opening support. Because it is intangible, it is usually paid in cash or included in an SBA 7(a) loan.
Real estate and build-out. Salons generally lease retail space. Build-out includes private tanning rooms, electrical service upgrades to run multiple high-draw beds, HVAC capable of removing the heat the beds produce, plumbing for spray tan rooms and any sauna or hydromassage units, a reception area and signage. Electrical and HVAC work are often the biggest surprises.
Equipment. UV beds and stand-up booths in several intensity levels, a spray tan booth or airbrush system, red light therapy units, hydromassage beds, infrared sauna cabins, salon management software and retail displays for lotions.
Opening costs and working capital. Opening retail inventory, marketing for the launch, insurance, permits, staff training and a reserve to cover rent and payroll while the client base builds.
Total investment. Item 7 of the current FDD gives the range. Categories to review include:
- Initial franchise fee
- Lease deposits and leasehold improvements
- Electrical and HVAC upgrades
- Tanning beds, booths and spray tan equipment
- Wellness equipment such as red light, hydromassage and sauna units
- Furniture, signage and salon software
- Opening retail inventory and grand opening marketing
- Additional funds for the initial period
Ongoing Fees and Your Electric RAYS Tanning & Spa Franchise Loan
Royalty and marketing. Item 6 lists the royalty and any advertising or brand fund contributions, along with how they are calculated.
Software and technology. Salon management and client check-in systems may carry recurring fees.
Lamp replacement and equipment upkeep. Tanning lamps wear out and must be replaced on a schedule, and beds need periodic servicing. These are ongoing costs lenders expect to see in projections.
How lenders factor these costs in. Lenders deduct royalties, marketing, rent, utilities, lamp replacement and payroll from projected revenue, then test whether the remaining cash flow covers debt payments in slower months as well as busy ones.
Franchisor Requirements for New Owners
Electric RAYS’ minimum net worth, liquidity and experience requirements were not available for us to verify. Ask the franchisor for its current qualifications and whether it expects owners to work in the salon. Lenders will also expect a cash injection from your own funds and reserves after closing.
The approval process. Expect an application, review of the FDD, conversations with the franchise team, approval, site selection with the franchisor and training before opening. Line up financing pre-qualification early so the lease and equipment orders can move together.
Ways to Own an Electric RAYS Tanning & Spa
A new salon. A start-up is underwritten on projections, the equipment budget and your experience. Read how we finance a franchise start-up.
Buying an existing salon. An established salon brings a client list, sales history and installed beds. Lenders use the salon’s financials and also look at the age and condition of the beds, since older equipment may need replacing soon after closing. See our guide to buying a franchise resale.
Converting an independent salon. If the franchisor permits conversions, an independent tanning salon owner may join the brand, keeping usable beds and adding branding and wellness equipment. Learn about conversion franchise financing.
Financing Options for an Electric RAYS Tanning & Spa Franchise
SBA 7(a) loans. Because the brand is listed on the SBA Franchise Directory, an SBA 7(a) loan can combine the franchise fee, build-out, equipment and working capital.
SBA 504 loans. The SBA 504 program suits an owner buying the building that houses the salon, or a large package of long-lived equipment.
Conventional term loans. Buyers with strong credit and collateral, or existing salon owners adding a location, may use a conventional business loan.
Equipment financing. Sunbeds, booths, red light units, hydromassage beds and sauna cabins are well suited to equipment loans or leases, with the equipment serving as collateral. See our franchise equipment financing page.
Working capital and lines of credit. Tanning revenue often runs ahead of summer and slows in other months. A line of credit can cover rent, payroll and lamp replacements in quiet periods. Explore franchise working capital options.
Seller financing on resales. A selling owner may carry part of the price. Seller notes are typically subordinate to the main loan, and SBA rules may limit their terms.
SBA Loans for Electric RAYS Tanning & Spa Franchisees
Before an SBA loan can close for a franchisee, the lender checks that the brand is on the SBA Franchise Directory. The listing means the franchise agreement has been reviewed for SBA eligibility; the borrower and project still need approval.
Directory listing. Electric RAYS Tanning & Spa is listed under code S8521 with two notes. First, when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Addendum may not be executed. Second, the lender (or, for a 504 loan, the development company) must make sure it obtains the correct lien position on all collateral as required by SBA lending rules.
What the Lease Addendum note means. The franchisor’s Lease Addendum gives it certain rights over the salon’s lease, such as taking over the space if the franchise ends. If the owner or a related company owns the building and pledges it for the SBA loan, the addendum should not be signed, so it does not compete with the lender’s rights in the property. Salons that lease from an outside landlord are generally unaffected.
What the lien position note means. SBA rules require lenders to hold a specific priority of lien on the assets securing a loan, such as equipment and real estate. The note is a reminder that nothing in the franchise documents, such as a franchisor’s rights in equipment or other assets, may leave the lender in a weaker position than required. In practice, expect your lender to review the franchise agreement and any equipment leases or supplier liens closely, and to ask for lien searches before closing.
Program size. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
SBA tips. Provide equipment quotes, an electrical and HVAC estimate, a lease or letter of intent, and monthly projections that show seasonal swings. The SBA loan calculator gives early payment estimates for planning only.
How Lenders Evaluate an Electric RAYS Tanning & Spa Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and owners typically sign personal guarantees.
Net worth and liquidity. A verified down payment and reserves for slow months are important in a seasonal business.
Industry and management experience. Experience in salons, spas, fitness or retail management helps show you can build a client base and manage a small team.
Business plan and projections. Model visits by month, the mix of single sessions, packages and spa services, retail lotion sales, lamp replacement costs and staffing.
The FDD and franchise agreement. Lenders review the term, renewal, transfers, territory and any franchisor rights in equipment, which ties back to the lien position note. Our article on reading an FDD for financing explains what lenders focus on.
Site and lease. Visibility, parking, nearby gyms, colleges and residential areas, and a lease that covers the loan term all support approval.
Historical financials on resales. Several years of statements and tax returns, plus an equipment list with ages and condition.
Tanning and Spa Equipment
Equipment is the core asset of a tanning salon. UV beds and booths come in different intensity levels, and offering several lets a salon serve both new and experienced tanners at different price points. Spray tan systems serve clients who want a sunless option, while red light therapy, hydromassage and infrared sauna units add services that can draw visits year-round.
For financing, the key questions are useful life and replacement timing. Lamps are a recurring cost, and beds eventually need upgrading to keep the salon competitive. Lenders may match equipment loan terms to the expected life of each piece, and buyers of an existing salon should budget for near-term replacements.
Multi-Unit Growth and Development Agreements
A regional brand may offer development rights for several salons in a market. Lenders usually fund one salon at a time, using the first salon’s results to support the next. Our article on multi-unit franchise financing explains how growth is typically structured.
Real-World Scenarios
A spa manager opening her own salon. A former spa manager opens a new salon near a busy shopping area, using an SBA 7(a) loan for the build-out and fee and an equipment lease for the beds.
Buying an established salon. A buyer purchases a salon from a retiring owner. The lender reviews the salon’s tax returns and the age of each bed, and the purchase includes a budget to replace older units.
Adding wellness services. An existing owner finances red light and infrared sauna equipment to draw visits during the slower tanning months.
Common Mistakes to Avoid
- Underestimating electrical and HVAC upgrades for multiple beds
- Projecting peak-season visits for every month
- Forgetting lamp replacement and equipment servicing costs
- Buying a salon without checking the age of the beds
- Overlooking franchisor or supplier rights in equipment that affect lien position
- Leaving no working capital for the first slow season
Read more in our article on franchise loan mistakes.
Next Steps to Finance Your Electric RAYS Tanning & Spa Franchise
Step 1: Request the FDD. Review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Confirm requirements. Ask the franchisor about net worth, liquidity and owner involvement.
Step 3: Get pre-qualified. Talk with a financing specialist about the right mix of SBA, equipment and working capital financing.
Step 4: Choose a site. Get electrical and HVAC estimates before signing a lease.
Step 5: Build seasonal projections. Show month-by-month visits, revenue and expenses.
Step 6: Apply, close and open. Coordinate loan closing, equipment delivery, construction and training.
Electric RAYS Tanning & Spa Franchise Loan FAQs
How much does an Electric RAYS Tanning & Spa franchise cost?
The estimated initial investment is in Item 7 of the current FDD. Equipment, electrical and HVAC work are typically the largest costs.
What is the franchise fee?
Item 5 of the FDD lists the initial franchise fee. Ask the franchisor for the current figure.
What ongoing fees will I pay?
Item 6 lists the royalty, marketing contributions and other recurring fees.
Is Electric RAYS Tanning & Spa on the SBA Franchise Directory?
Yes, under code S8521, with notes on the Lease Addendum and lien position explained above.
Can I finance tanning beds separately?
Yes. Equipment loans and leases can cover beds, booths and spa equipment, with the equipment as collateral.
Can I buy an existing salon?
Yes, with franchisor approval of the transfer. Lenders review the salon’s financials and the condition of its equipment.
Can a first-time owner get an Electric RAYS Tanning & Spa franchise loan?
Yes, if they meet lender and franchisor requirements. Management or customer service experience and adequate reserves strengthen the request.
Does the franchisor offer financing?
Item 10 of the FDD discloses any franchisor financing. Most owners arrange outside financing.
How long is the franchise term?
Item 17 of the FDD lists the term, renewal and transfer conditions.
Final Thoughts
An Electric RAYS salon is an equipment-heavy, seasonal service business, so a strong financing plan matches equipment financing to bed life, budgets for electrical work and keeps cash for slow months. The brand’s SBA listing makes SBA 7(a) and 504 financing available to qualified buyers seeking an Electric RAYS Tanning & Spa franchise loan, provided the lease and lien requirements are handled correctly.
US Professional Funding helps franchise owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing solutions.
