How do I check a salon or spa’s supplier credit terms and open orders?

Start with the product suppliers for hair colour, skincare, nail products and disposables, and add the equipment and linen providers. For each, ask for the account terms, the latest statement and any agreement the owner signed. Match balances to what the financial statements show as owed.

Credit is often tied to the owner’s name or a personal guarantee. A new owner usually has to apply fresh, and terms may be tighter at first. Ask each supplier directly, with the seller’s consent, whether the account can pass to you and under what conditions.

Look at open orders. Is stock arriving that you do not need, or that does not sell? Are deposits on special orders recoverable? Also see whether the shop is dependent on one supplier, or tied to a minimum purchase, as these can limit your choices. Finally, read the stock levels against actual sales. A shelf that looks full may hide product past its best, and a thin one may signal a tight credit position. Your lender will want to see how you plan to cover working capital. Ask about returns as well, since opened or slow-moving product is often hard to send back. That affects how much stock you really take on.

Key takeaways

• List each supplier, balance, term and open order, and match to the books.
• Ask whether credit survives the sale or you must apply again.
• Check for single-supplier ties and unwanted incoming stock.