How can I tell whether a salon or spa’s leased equipment will stay with the business?

Walk the shop with a list: chairs, wash stations, lasers, steam rooms, tanning or massage tables, and the point-of-sale system. For each, ask whether it is owned, leased or being paid off. Stickers or plates from a financing company are clues.

Request each lease or financing agreement. Read what happens if the business changes hands: must the lessor approve, can the agreement be assigned, and are there fees or a buyout option? Note the remaining term and the payment, as these affect your cash flow. Ask who is responsible for maintenance and insurance.

Contact the lessor, with the seller’s consent. Ask whether you would be accepted as the new lessee, and whether a new credit check would apply. If it will not transfer, learn the cost of buying the item out or replacing it, and who bears it. Make sure the purchase agreement lists which items are included and that leased items are labelled as such. Your lawyer should check this, and a registry search can show whether a lender has a claim. Keep copies of everything you find, and ask the seller to confirm the list of leased items in writing so there are no surprises at closing. Ask if any items were borrowed or lent by suppliers for display.

Key takeaways

• Sort every large item into owned, leased or financed.
• Read each agreement for transfer, buyout and maintenance terms.
• Get the lessor’s answer in writing before closing.