The spa due diligence checklist

This page is general information, not legal or tax advice. Rules differ by state and change over time, so confirm the legal, licensing and tax items with an attorney and a CPA in your state.

Who will read your data room?

If your spa sells to an individual, an SBA lender may well read the file too: 78% of buyers in BizBuySell's Q2 2026 survey, across all industries, expected to use SBA financing. Private equity buyers of med spas routinely run their own financial due diligence, according to VMG Health, a healthcare diligence firm.

What does an SBA lender check?

The lender commissions the business valuation, from an accredited independent appraiser above the thresholds in the table below, and checks the figures the valuation relied on against your IRS tax transcripts. On cash-basis spa books, those figures count a package, series or gift card as revenue on the day it is sold, before the client comes in for the treatment. Where a quality of earnings report is required, it may not be prepared by or for you, and its cash proof reconciles your bank statements to your income statement and tax returns. If clients pay you in cash, expect questions on any month where deposits and sales do not match.

SBA rules on this page are from SOP 50 10 8.1, which governs 7(a) applications that receive an SBA loan number on or after October 1, 2026. Applications submitted through September 30, 2026 stay under SOP 50 10 8, shown in the right-hand column where it differs.

1. Financial records

In med spa deals, VMG Health, a diligence firm, adjusts cash-basis books for two things: prepaid packages, memberships and gift cards sold before the treatment happens, and injectable purchases timed to supplier rebates, which can make gross margins misleading on a cash-basis income statement. Hand both over already explained.

• Year-end financial statements for the last three years, at the highest level you have: audited, reviewed or CPA-compiled, otherwise tax returns.

  Add a note to each year saying when you record package, series and gift card sales: on the day they are sold, or when the treatment is delivered.

• Your most recent interim statement and the same months last year, so a buyer can separate a holiday gift card or package promotion from real growth.

• Business tax returns for the same three years, including Schedule C if you file one; an SBA lender must verify a selling sole proprietor's Schedule C.

  The lender pulls your IRS transcripts and must reconcile any gap with your statements. Reconcile them yourself first, starting with gift card and package sales.

• An add-back schedule: each personal or one-time expense you want added back, with the statement behind it.

  If your spa earns enough to be valued on EBITDA, BizBuySell says private equity and competitor buyers expect to pay a manager to replace the owner-operator, so list the work you do yourself. The guide to how much a spa business is worth explains SDE and EBITDA.

• An unearned revenue report: unused package and series sessions, membership credits and unredeemed gift cards, by client. Spa-specific

  Share totals first. The client-by-client detail waits for a signed letter of intent, and in a med spa your healthcare counsel decides how it is shared (see what to hold back). See also how gift cards, packages and memberships are handled in a sale.

• Revenue by month, by service line and by provider. Spa-specific

  VMG Health's example: a December sale of prepaid neurotoxin packages shows up as December revenue on cash-basis books, for treatments delivered the next year.

• Injectable and product purchases by month, with the rebate each purchase earned. Med spa

  Buying in bulk in one month to capture a supplier rebate can make gross margins misleading on a cash-basis income statement, VMG Health notes.

• One-time purchases you expensed, such as a device paid for outright, and any treatment rooms, staff or equipment you share with another business. Spa-specific

• Weight-loss injection revenue on its own line, if you sell compounded semaglutide or tirzepatide. Med spa

  The FDA declared both shortages resolved in 2024 and 2025, which ended the shortage-based enforcement discretion that had covered compounded copies, so expect a buyer to look at that revenue on its own.

• If the business purchase price, not counting owner-occupied real estate, is $3 million or more and a new owner is using an SBA 7(a) loan under SOP 50 10 8.1 (see the SBA table): bank statements for the trailing twelve months and the last two fiscal years, for the quality of earnings report's cash proof.

  Mark cash-paid services and tips so the deposits tie to your booking-system totals.

2. Corporate records and ownership

Small, privately owned businesses are typically sold as asset sales, a broker wrote in an undated BizBuySell learning center article. If you sell the entity instead, the buyer inherits its liabilities, known and unknown, as Spencer Fane, a law firm, notes for med spa sales. So expect this folder to reach back to old adverse-event reports, board complaints and provider disputes.

• Formation documents, operating agreement or bylaws, and signed minutes or consents for every entity involved, including the professional entity if you run a med spa.

• An ownership chart with every owner's percentage, including any equity promised to a lead injector or medical director.

• The agreements that connect your business to the medical side: the management services agreement, the medical director agreement, and who owns the professional entity. Med spa

  Many states prohibit the corporate practice of medicine, so med spas often operate under a medical director or management agreement, and a sale has to transfer or restructure it, according to Spencer Fane.

• Evidence that your ownership structure meets your state's rules. Med spa

  SOP 50 10 8.1 uses med spas as its example of a business whose ownership structure the lender must document against state requirements. In California, for instance, registered nurses, physician assistants and other listed licensees may together hold no more than 49% of a medical corporation's shares, and the number of them holding shares may not exceed “the number of persons licensed by the governmental agency regulating the designated professional corporation.” Lay investors are not on the list. Confirm your state's rules with healthcare counsel.

• The management fee terms between the management company and the professional entity, in writing, including who pays for injectables, device leases and the medical director. Med spa

• Trademark registrations and assumed-name filings for the spa's name and for any branded facial, treatment or membership program you market.

• Adverse-event reports and client injury claims from treatments, and any lawsuits, open or closed, with how each was resolved.

3. Licenses, permits and compliance

Establishment licenses can set your closing date, because in the states below a buyer cannot simply take over yours and has to be licensed before it can operate. The guide to selling a day spa or massage business covers license transfers in more detail.

Can a spa buyer take over your establishment license?

Every spa

• Every establishment license, with its number and renewal date, and your state's rule for a change of owner. Spa-specific

• Individual licenses for every esthetician, massage therapist and cosmetologist, with expiry dates.

• Recent state board inspection reports, and any board complaints against the business or your staff.

• Biomedical waste permits and your sharps or waste hauling contract. Spa-specific

  Under a Florida rule last amended in 2002, these permits are not transferable, and the new owner applies for its own within 30 days of starting business. Spas generating less than 25 pounds of biomedical waste per 30 days are exempt from the permit and fee. Florida published a notice of rule development in April 2026, so check for changes.

The medical side of a med spa

Spencer Fane tells med spa sellers to confirm full regulatory compliance before a sale, including proper delegation agreements, physician supervision protocols and the licensure of all medical professionals. In practice, that means:

• The medical director agreement, and agreements with any other supervising or collaborating physicians. Med spa

• Delegation agreements and supervision protocols for every injector and other non-physician provider. Med spa

• License verifications for every physician, nurse practitioner, PA and nurse, with expiry dates. Med spa

• A DEA registration, if you stock controlled substances such as testosterone. Med spa

  Federal rules bar transferring a registration without DEA's written consent.

• Written orders for every delegated procedure. Med spa

  In Texas, the delegating physician must approve existing orders in writing or write new ones, and they must cover patient screening criteria and how complications and emergencies are handled.

• Chart evidence of the exam before treatment, the step the industry calls the good faith exam. Med spa

  Texas rules effective January 9, 2025 require a physician, or a PA or APRN acting under a physician's delegation, to establish the practitioner-patient relationship and keep an adequate record before a delegated nonsurgical cosmetic procedure. In California, prescribing a dangerous drug without an appropriate prior examination and a medical indication is unprofessional conduct. Ask healthcare counsel in your state what your charts need to show.

• Photos of your posted notices and staff name tags. Med spa

  Texas requires a business offering physician-delegated nonsurgical cosmetic procedures to post the board's complaint notice and each delegating physician's name and license number in every public area and treatment room, and each person performing them to be identifiable by a name tag or similar means showing identity and credentials. An SBA lender must visit the business, so assume someone will look.

• Signed patient consents behind every before-and-after photo you publish. Med spa

• Where patient charts and before-and-after photos are kept (EMR, booking system or the medical director's practice), who holds them, and what will go into the data room. Med spa

  If your practice is a HIPAA covered entity, HIPAA treats a sale to another covered entity, or to a buyer that will become one, and the due diligence for it, as health care operations. Privacy Rule limits such as minimum necessary still apply. A 2016 CMS guide says a provider is a covered entity if it, or a billing service acting for it, sends covered transactions electronically, and your state's medical-records laws apply either way. Let healthcare counsel decide what goes in.

• In Texas, a patient-notice plan if a physician will leave as part of the sale. Med spa

  Texas Medical Board rule 163.4 requires a departing physician to notify the patients they saw in the last two years and to post a notice at least 30 days before leaving. Ask Texas healthcare counsel how it applies to your structure.

4. Staff and providers

Losing top injectors during diligence can quickly change how a buyer values a med spa, according to the president of Skytale, an investment bank and consulting firm in medical aesthetics, quoted by AmSpa in March 2026. The same article says buyers are increasingly focused on keeping top performers engaged after closing.

• A staff list with role, state license number, start date, pay type (hourly, commission, per-service or booth rent) and rate, including any esthetician or massage therapist paid as a contractor.

• Written commission and tip policies, and payroll registers that show commissions, tips and retail incentives separately. Spa-specific

  Commissioned employees of a retail or service establishment are exempt from federal overtime only if, in every overtime workweek, their regular rate exceeds 1.5 times the applicable minimum wage, and commissions are more than half their earnings over a representative period. Tips never count as commissions. That is from a 2008 Department of Labor fact sheet that is still posted. Whether your spa counts as a retail or service establishment depends on the facts, and state law can be stricter; ask an employment lawyer.

• Employment and contractor agreements for every injector, esthetician and massage therapist, with non-compete, non-solicitation and change-of-control clauses flagged.

• Your employment lawyer's view of which of those non-competes your state will enforce. Spa-specific

  The FTC's nationwide non-compete rule is not in effect, so state law mostly decides, though the FTC can still bring individual cases. Since January 1, 2024, California law makes non-competes that are void under its rules unenforceable, wherever and whenever they were signed. In Texas, a non-compete with a nurse or physician assistant signed or renewed on or after September 1, 2025 needs a buyout capped at their annual pay, a one-year limit and a five-mile radius, in clear written terms. Estheticians are not covered by that rule.

• Injector and esthetician pay plans (for example hourly, per unit of neurotoxin, or a share of treatment revenue), production by provider, and any retention bonuses already promised. Med spa

• Accrued paid time off, commissions earned but not yet paid, and your policy on commission for prepaid sessions a provider sold but has not yet performed.

5. The lease and real estate

A spa's lease carries its build-out: plumbed treatment rooms, wet areas and ventilation that a buyer cannot cheaply rebuild elsewhere. An article on BizBuySell says a long lease the buyer can take over supports value, while a short or month-to-month lease can lower it, and some buyers might walk away rather than negotiate a new one.

• The lease with every amendment and side letter, its assignment and landlord-consent clauses, and any use clause that limits medical, massage or other services. Spa-specific

• The remaining term and renewal options, set against the buyer's likely loan term.

  Compare it with the loan-term and lease-length rows in the SBA table above. A buyer who borrows to rebuild treatment rooms or add a wet area is more likely to cross the leasehold-improvement threshold.

• Build-out records: what you spent on treatment rooms, plumbing, wet areas and ventilation, and who owns those improvements when the lease ends. Spa-specific

• If you are a franchisee: the franchise agreement's transfer section and the franchisor's approval conditions. Spa-specific

  Massage Envy's franchise agreement, for example, conditions a resale on, among other things, the buyer completing the initial training program, proving minimum net worth and liquidity, and getting the landlord's consent to assign the lease or approved substitute premises.

• If you own the building: whether it is in the sale or leased to the buyer, a draft lease if it is leased, and who will own the plumbing, wet-area and ventilation build-out under that lease.

  BizBuySell says keeping the real estate and leasing it to the buyer widens the buyer pool by reducing buyers' cash and financing needs. If the building is in the sale, the SBA thresholds above are measured on the business price without it.

6. Equipment, devices and inventory

In a med spa, read the device contracts, not just the equipment list. A laser you lease, or one whose purchase contract restricts resale, is not simply yours to sell.

• An equipment list covering every laser and energy-based device, treatment bed, facial steamer and hydrotherapy unit: make, model, serial number, purchase date and price, and whether each is owned, leased or financed.

• Every device lease and financing agreement. Med spa

  A med spa cannot sell a laser or device it leases, and ending a lease early can bring substantial penalties, according to a 2022 article by an attorney on the AmSpa site.

• Device purchase contracts, read for resale terms. Med spa

  Some require manufacturer approval before resale, pre-approval of the buyer, or recertification, and recertification fees can be substantial, the same 2022 article says. In a 2019 article, Alex Thiersch, then AmSpa's CEO, put some laser recertification fees at $50,000 or more, an upper-end figure.

• Any device you share with, or rent from, another practice, with the revenue-sharing terms. Med spa

  VMG Health notes that equipment partnerships carry contract and revenue-sharing risks that can be missed without financial due diligence.

• Service contracts, warranties and maintenance logs for devices and for wet-area equipment such as steam rooms and hydrotherapy tubs.

• An inventory count of retail skincare, backbar product and injectables, with expiry dates. Spa-specific

  Buyers generally will not pay extra for excess inventory that has sat on the balance sheet for more than a year, an article on BizBuySell says. Pull expired injectables and discontinued backbar lines before the count, and list retail skincare separately from product you use in treatments.

7. Supplier accounts and programs

At least one injectable maker ties a new account to a named paying business and medical director, and at least one says its rewards cannot be transferred. Ask each injectable maker and professional skincare brand what carries over to a new owner before you price rewards status into the deal.

• A list of injectable and device supplier accounts: account holder, medical director on file, pricing tier and rewards balance. Med spa

  Allergan Aesthetics' new-account process ties an account to a named financially responsible party and a named medical director. Evolus's terms for providers in its rewards program say those rewards cannot be transferred or assigned for any reason.

• Rebate statements for the same months as your purchase history. Med spa

• Professional skincare and retail brand agreements: minimum orders, territory terms, and whether the brand must approve a new owner. Spa-specific

• Service contracts the buyer may take over, such as booking software, payment processing, phones, marketing, and laundry and linen service.

8. Clients, bookings and online accounts

A sell-side advisor writing on the AmSpa site lists recurring revenue and patient and provider retention among what platform buyers prioritize. Your booking system already holds that evidence, so export it before a buyer asks.

• Booking-system reports for three years: active clients, visits per client, rebooking rate and revenue by provider. Spa-specific

  If you run a med spa, compare your repeat-patient share with the 73% average in AmSpa's 2024 State of the Industry report before a buyer does. It is a survey average, not a rebooking-rate benchmark.

• A membership roster: active members, monthly dues, banked treatment credits not yet used, how long each has been a member, and cancellations by month. Spa-specific

• The name of the primary owner on your Google Business Profile.

  Reviews that name your injectors, therapists and treatments are part of what a buyer is buying. Google advises transferring primary ownership to the new owner when a business is sold, so those reviews stay. Only the primary owner can do it, and the buyer has to be added to the profile first.

• Your payment processor's steps for a change of owner.

  On Zenoti Payments, for example, the new owner cannot process payments until identity verification is complete, and chargeback liability moves to the new merchant account.

• Your website, domain, social media and email marketing accounts, including the ones that hold your before-and-after galleries, and who controls each login.

9. Tax and closing

This is not tax advice. In a spa sale, the tax paperwork centers on devices you have depreciated, how the price is split between equipment and goodwill, and sales tax on retail skincare. Confirm each item with a CPA in your state.

• A depreciation schedule for every device and piece of equipment.

  Gain on depreciated equipment, such as a laser you have written down, is taxed as ordinary income up to the depreciation already taken, per IRS Publication 544. Ask your CPA how any section 179 expensing affects your numbers.

• A draft allocation of the price across the IRS asset classes.

  In an asset sale with goodwill, you and the buyer each report the allocation on IRS Form 8594 with your returns for the year of sale. Lasers, treatment beds and other equipment are generally Class V; goodwill takes what remains, in Class VII.

• Sales tax permits and returns, if you sell retail skincare. Spa-specific

• In California, if you hold a seller's permit for retail skincare or other product: an early request for a sales tax clearance.

  Unless the buyer gets a certificate of payment from the California Department of Tax and Fee Administration, it generally must withhold enough of the price to cover your unpaid taxes, fees and assessments, or it may be held liable for the amount it should have withheld, up to the purchase price.

• In New York, if you collect sales tax (for example on retail skincare) and sell the business assets: the buyer's bulk-sale notice on Form AU-196.10, filed at least 10 days before the buyer pays or takes possession, whichever comes first, per Tax Bulletin ST-70 (issued 2013, updated 2025).

  Otherwise the buyer can be held liable for your unpaid sales tax. A stock sale in which the company keeps its assets is not a bulk sale.

• Payoff letters for loans, device financing and any liens.

  Small asset sales are usually priced cash-free and debt-free, with the seller paying off debt at closing, a broker wrote in an undated BizBuySell article. For a med spa, that can include the balance on a financed laser or other device.

Which spa closing steps need lead time?

Several spa and med spa closing steps have minimum notice periods or long lead times, from a Texas physician's 30-day patient notice to identity verification for a new owner on Zenoti Payments. Put the ones that fall before closing on the calendar before you sign a purchase agreement with a closing date in it.

Why is med spa due diligence taking longer than it used to?

Writing on the AmSpa site in March 2026, AmSpa's CEO said med spa deals that once moved quickly now take significantly longer, as buyers look harder at financial performance and operational stability. Skytale's president, quoted in the same article, said quality of earnings reviews have become more detailed and that buyers increasingly track performance throughout the closing process.

A sell-side advisor writing on the AmSpa site in May 2026 added that closer scrutiny of scope of practice, injectable supervision and MSO structures, particularly in states like California, led buyers in 2025 to demand cleaner compliance documentation. Buyers may also weigh the Stop Corporate Takeovers of Physicians Act of 2026, which AmSpa reports would generally bar entities not majority-owned and controlled by licensed health professionals from owning or controlling a medical practice. It was introduced on September 16, 2026 and is not law.

So have healthcare counsel review folders 2 and 3 before a buyer does, and keep the spa running at full pace until closing day. The guide to selling a med spa covers ownership rules and deal terms in more depth.

What should you hold back until a letter of intent?

Before a letter of intent, a buyer needs enough to price the spa: summary financials, lease terms, revenue by service line, totals for unused packages, memberships and gift cards, and the equipment list. Client names and each provider's pay are what a competitor posing as a buyer would use to recruit your staff and clients, so hold them back until there is a signed letter of intent and a confidentiality agreement. In a med spa, client names, charts and anything else that identifies a patient go to a buyer only in the way your healthcare counsel sets up.

Start building the folders a year before you plan to sell; the guide to preparing to sell a spa in the year before covers what to fix first. How to sell a spa business shows where due diligence falls in the whole sale, and what a spa business is worth explains how these same documents move the price. If you want a number before you gather any of this, request a free valuation of your spa. Requesting a valuation does not list your business.

Sources

All sources accessed September 29, 2026.

1. BizBuySell (CoStar Group), Q2 2026 Insight Report
2. VMG Health (Lukas Recio, Jacob Mullen), 2025-06-11
3. U.S. Small Business Administration, SOP 50 10 8.1 (Appendix 15, Business Valuation Requirements), 2026-09-25
4. U.S. Small Business Administration, SOP 50 10 8.1, effective 2026-10-01
5. U.S. Small Business Administration (Information Notice 5000-880695), 2026-08-14
6. BizBuySell (CoStar Group), Undated. Accessed 2026-09-29.
7. U.S. Food and Drug Administration, Content current as of 2026-04-01
8. BizBuySell Learning Center, Undated on page
9. Spencer Fane LLP (Crystal L. Howard, Hillary R. Martel), 2025-08-19
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11. Texas Department of Licensing and Regulation, Not dated on page
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14. The Florida Senate (Florida Statutes 480.043), 2025 Florida Statutes
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19. Legal Information Institute (22 Tex. Admin. Code 169.27), Eff. 2025-01-09
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25. American Med Spa Association (Adam Reinebach, CEO; quoting Annie Robertson Hockey, President, Skytale), 2026-03-10
26. U.S. Department of Labor, Wage and Hour Division (Fact Sheet #20), Revised July 2008
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28. California Legislative Information (Business and Professions Code 16600.5), Added by Stats. 2023, Ch. 157 (SB 699), eff. 2024-01-01
29. Texas Legislature (SB 1318, enrolled; Bus. & Com. Code 15.501), Effective 2025-09-01
30. BizBuySell (Shelly Garcia), Undated. Accessed 2026-09-29.
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32. BizBuySell (The BizBuySell Team), Undated. Accessed 2026-09-29.
33. American Med Spa Association (Patrick O'Brien, JD), 2022-03-22
34. American Med Spa Association (Alex R. Thiersch, JD), 2019-10-28
35. BizBuySell (Shelly Garcia), Undated. Accessed 2026-09-29.
36. Allergan Aesthetics (AbbVie), Not dated on page
37. Evolus, Inc., Effective 2025-08-01
38. American Med Spa Association, 2026-05-15
39. American Med Spa Association, 2024-11-06
40. Google Business Profile Help, Accessed 2026-09-29
41. Zenoti, Not dated on page
42. Internal Revenue Service, Publication 544 (2025), Sales and Other Dispositions of Assets, 2025 edition
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45. New York State Department of Taxation and Finance, Tax Bulletin ST-70 (TB-ST-70), Bulk Sales, Issue date 2013-06-24
46. American Med Spa Association (AmSpa), 2026-09-17