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Business loans for salons and spas

Get the financing your salon needs to stay on top of the trends.

Editor's choice: OnDeck business lines of credit

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  • Business loan amounts up to $250k
  • Repayment terms up to 18 months
  • $100k in annual revenue required
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Name Product Filter Values Loan amount APR Requirements
Biz2Credit business loans
Finder Rating: 3.75 / 5: ★★★★★
Biz2Credit business loans
$25,000 – $6,000,000
Starting at 5.99%
6+ months in business; $100,000+ monthly revenue; 500+ credit score
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OnDeck short-term loans
Finder Rating: 4.6 / 5: ★★★★★
OnDeck short-term loans
$5,000 – $250,000
As low as 35%
600+ personal credit score, 1 year in business, $100,000+ annual revenue, active business checking account
A leading online business lender offering flexible financing at competitive fixed rates.
Fora Financial business loans
Finder Rating: 4.1 / 5: ★★★★★
Fora Financial business loans
$5,000 – $500,000
6+ months in business, $12,000+ monthly revenue, no open bankruptcies
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Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.

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6 business loan types are available for salons and spas

You might have heard that some lenders offer loans specifically for salons, but your options aren’t limited to those few. These are some of the business loan types your salon might want to consider.

  • Lines of credit are similar to credit cards, but typically come with a higher limit, lower APRs and a slightly different method of repayment. A line of credit can be helpful for salon owners during the winter, which tends to be a slow season — especially for nail salons.
  • Merchant cash advances give you an advance on future sales. Your business can typically borrow a certain percentage of its annual revenue and pay it back plus a predetermined fee with a percentage of your sales each day. This process is relatively easy if your customers pay by credit card, as the lender can deduct daily or weekly repayments based on credit card sales.
  • General use business term loans come in fixed amounts and are best for covering one-time expenses. Consider either an unsecured or secured loan. Secured loans can be cheaper but are backed by you or your business’s assets, while unsecured loans don’t require collateral.
  • Equipment financing can help cover you if you’re constantly buying equipment like manicure tables, foot-spa jets and fans. An equipment loan can take over these expenses.
  • Commercial real estate financing is what your business needs when it’s time to move to a new location or expand. A commercial real estate loan will help you cover those costs.
  • Short-term business loans are quick, small-dollar loans to get you out of an unexpected disaster — like repairing a broken-down backwash unit during wedding season. But they’re also one of your more expensive options and are best left for emergencies.

For a loan alternative, consider available grants

Your salon might be able to qualify for a small business grant, though there aren’t any specifically for salons. Owners can apply for grants from specific companies like FedEx or state and local resources.

Women-owned salons might also qualify for grants for female entrepreneurs like those offered by the Amber Foundation and InnovateHER.

Identify the best ways a business loan can help your business

Is your salon is struggling because of spotty cash flow? Start looking into merchant cash advances or lines of credit.

Do you need to upgrade your equipment or move to a trendier ZIP code? Then, either equipment or real estate loans are your best bet.

In short: Pinpoint your needs and find the type of financing that makes the most sense for you.

Found the right loan type? It’s time to check out lenders.

Look for ones that offers the amount you need with a repayment schedule that works for your business’s cash flow. Merchant cash advances draw from your daily sales, while most other loans come with monthly or weekly repayments.

Compare costs

When it comes to comparing costs, consider APR, monthly repayments and total loan cost. The APR is an expression of your loan’s interest and fees as a percentage. It’s a quick way to compare loans with the same term length — or the same amount of time to pay it off.

Monthly repayments are how much your business needs to pay each month.

Lowering your monthly repayments by choosing a longer loan term initially looks attractive, but you’ll end up paying more in the long run. To keep your overall costs to a minimum, you might want to go for the shortest loan term that your business can comfortably manage.

You’ll also want to compare other factors like the company’s reputation with customers and how accessible its customer service line is. While online reviews aren’t always the most accurate picture of a customer’s experience, lots of similar complaints can highlight a lender’s weak spots.

8 common business expenses financing can cover

  • Remodeling and investing in interior design can seriously boost your revenue if done right. A business term loan can help you cover these costs.
  • Upgrading equipment will help you stay on top of the style trends. An equipment loan can help ensure your business is always on the cutting edge, and it always gives top-notch services.
  • Proper inventory and supplies will best help you give someone the makeover they most desire. A line of credit can help you pick up these recurring expenses when your business can’t.
  • Covering cash flow gaps during seasonal business slumps. If you’re struggling to cover your costs during the post-holiday slowdown, a merchant cash advance or line of credit could do wonders to keep your salon afloat.
  • Moving or expanding will mean taking on commercial real estate loans so your business can grow.
  • Marketing gets the word out to your clientele. Hire a marketing firm, or have your own in-house expert — it'll pay for itself. Term loans, merchant cash advances and lines of credit can all help you get your feet off the ground here.
  • Investing in products with natural ingredients can lower your healthcare costs. Working in a salon with constant exposure to harsh chemicals can have a hugely negative effect on employee health.
  • Moving into the digital age makes it easier for digital natives to book an appointment, pay and tip — and will also bring in a younger crowd. Equipment loans and term loans can help your salon take this leap.

5 items to organize before you apply

While it depends on what type of loan you’re applying for and how long your salon has been around, you’ll typically need to provide the following information.

  1. Bank statements give most lenders a sense of its current revenue flow. Some might also ask to see your personal bank statements, especially if you’re backing the loan with your assets. Since salons rely on multiple types of payments, you might need to provide extra documents, which can take more time if it’s not something you already have on hand.
  2. Tax returns provide lenders an overall idea of your salon’s yearly earnings. Like with bank statements, some lenders might also ask to see your business’s tax returns.
  3. Credit card sales records can show it has a positive cash flow, if your bank statements and tax returns don’t paint a clear picture of your salon’s actual earnings.
  4. Your personal credit score can play a huge factor in whether or not you’re approved, and is even more important if your business is young. Some lenders may look at your salon’s business credit score, but personal credit scores are far more common for lenders to consider.
  5. A business plan makes banks and credit unions happy, and some online lenders will ask for one as well. It’s a good idea to have one in any case — it can help keep your business on target. Pay particular attention to the financial projections, since your lender will partly rely on those when determining whether or not your salon can afford the loan.

How soon can I expect to receive funding for a salon?

It depends on your lender and what types of financing your salon needs. It also depends on what documentation your lender asks for. Online business loans can take as little as one business day, while bank loans can take as long as one month.

Since salons rely on multiple types of payments, you might need to provide extra documents, which can take more time if it’s not something you already have on hand.

Overcoming common challenges: Revenue tracking, financing eligibility and credit score

Hair, nail and beauty salons can rely on a combination of credit card and cash sales, so you might have a little more trouble presenting your business’s finances than other types of companies. One solution to this is to use accounting software to easily keep track of your revenue. Some online lenders might even ask to access your business’s accounting software instead of looking at bank statements.

Newer salon owners can have trouble qualifying for financing, especially if they’re less than a year old. If your salon really needs that loan, focusing your energy on your business plan might be your best bet. Not only can your financial projections help your lender get an idea of where you might be in a year, but it’s also where you get to make a case for your salon.

If you have a new salon but established personal credit, you could consider a personal loan for business use.

Have poor personal credit? Unfortunately, you might have trouble qualifying for a competitive rate. You might want to look into other options like crowdfunding, grants or equity investments from venture capitalists or angel investors instead. Startups can also benefit from these options.

7 ways to help your salon succeed in 2021

Simply Organic — the largest distributor of professional organic salon products in the world — offers these tips on growing a beauty business.

  1. Go natural, go organic with natural products that are good for your employees and your customers. If your salon doesn’t stock natural options already, you might want to reconsider for your eco-minded customers.
  2. Market to your niche instead of trying to appeal to everyone. Know who your customer is and target them. You might have more success developing a loyal following that way.
  3. Use Instagram to get the word out about your salon without forking over too much cash. It gives you the opportunity to show off new looks and can expose you to a client base you might not have otherwise reached.
  4. Invest in education and some extra training for your staff to set your business apart from the rest. Stay on top of the latest trends by signing everyone up for skills upgrading.
  5. Don’t ignore men, since men have become increasingly interested in self-care. Experts predict that 2021 will see a spike in male-centric grooming products. Pay attention to trends for all genders to stay current, rather than focusing on women alone.
  6. Upgrade your technology to make it easier for customers to book an appointment and pay using apps. For example, Apple Pay or Venmo can make all the difference if you’re trying to attract younger clientele. Bonus points for giving customers the option to leave cashless tips.
  7. Have your own products, be it nail polish, lotion or haircare products. Customers buy more from their salon that you might think, so increase your profits by offering your own product line.

Bottom line

Keeping up with trends is your business as a beauty or nail salon owner. When that calls for funds you don’t have up front, a business loan can help you get what your salon needs to grow.

From lines of credit and merchant cash advances to equipment and commercial real estate financing, there are several types of business loans out there to meet your salon’s specific situation. To learn more about what option is right for you, you might also want to check out our comprehensive guide to business loans.

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