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Best Beauty Salon Loans of 2022

Becky Hanson

Whether you’re currently operating or planning to start up a salon business, a beaty salon loan can help finance everyday expenses, a special event, or a brand new salon. We’ve evaluated the best business loans based on loan terms, fees, rates, customer satisfaction, and overall quality.

Quick approvals with fast funding process

$6,000,000

Max. Loan Amount

12+ months

Time In Business

$10,000+

Monthly Revenue

650

Min. Credit Score

Overview

Biz2Credit provides a fast application process that can take less than 4 minutes and provide funding within 72 hours.

What we like

  • Fast funding process
  • Funding advisors available
  • Various repayment options
  • Large funding amount

What we don't

  • Origination fee
  • Maximum term of 36 months
  • Business assets required

No prepayment and origination fees

$250,000

Max. Loan Amount

12+ months

Time In Business

$3,000+

Monthly Revenue

640

Min. Credit Score

Overview

If you require cash quickly due to a cash flow shortfall or have a less than perfect credit score, Kabbage could be a promising option.

What we like

  • Borrowers with fair credit can apply
  • No prepayment penalties
  • Streamlined application journey
  • No origination fees

What we don't

  • Late payment fees are applicable
  • Short repayment terms
  • Business assets required

Business loans tailored to your needs

$500,000

Max. Loan Amount

6+ months

Time In Business

$10,000+

Monthly Revenue

600

Min. Credit Score

Overview

National Funding offers small businesses working capital and equipment financing loans that are suitable for a broad range of businesses, and you could receive approval and funding within 24 hours.

What we like

  • Early payoff discounts
  • Fast approval and funding
  • High approval rates for loan applications
  • Personalized experience

What we don't

  • Daily or weekly repayment
  • High minimum annual revenue

Considers applicants with bad credit profiles

$500,000

Max. Loan Amount

6+ months

Time In Business

$8,000+

Monthly Revenue

500

Min. Credit Score

Overview

Uplyft Capital provides fast funding turnarounds and a straightforward online application process.

What we like

  • Bad credit businesses are eligible
  • Fast funding turnaround
  • Transparent factor rates
  • Simple online application process
  • Range of funding options

What we don't

  • High factor rate
  • Daily or weekly repayment
  • Low revenue businesses do not qualify

What is a beauty salon loan?

A beauty salon loan is a small business loan to help you with the initial costs of opening or expanding your beauty salon. The loan can finance equipment, inventory, furniture, and fixtures.

How do beauty salon loans work?

You apply for a beauty salon loan with your lender, which will determine your financial situation based on income, credit history, and cash reserves (or lack thereof). If you meet the terms outlined in your contract, you’ll get approved and receive a lump sum of money that you can use for whatever purpose you choose.

What are the requirements for a beauty salon loan?

The requirements for a beauty salon loan are not as strict as they are in other industries. However, if you’re a beauty professional that needs a loan, it is important to know what lenders look for in your application. Here are some of the requirements:

  • Experience in the business: Lenders want to see that you have experience running a successful salon business before they give you money. They want to see you know how to manage employees and other aspects of running a business before providing capital.
  • Credit history: Your credit score is essential when applying for any type of loan or line of credit. This includes loans for beauty salons as well as other types of businesses. If your score is too low, many lenders will not consider giving you money because they do not feel comfortable lending money to someone with little or no credit history.
  • Revenue: Lenders want to ensure that the business will be profitable enough to pay them back, so they’ll want some proof of financial viability from the salon or spa. You might be able to get away with just showing them projections from your business plan if you don’t have any actual revenues yet. However, you have to make sure that these projections are realistic and not overly optimistic.

What are the types of beauty salon loans?

There are many different types of loans that can help you grow your business, including:

  • Term loans: These loans have a fixed repayment schedule over a set period and can be used to purchase equipment, supplies, or inventory. The term loan is paid back in monthly installments with interest charges included in each payment.
  • SBA loans: Banks and other financial institutions issue Small Business Administration (SBA) loans to help small businesses succeed. Small businesses typically use SBA loans with annual revenue under $5 million and cannot get conventional credit from commercial lenders because they lack collateral or good personal credit history.
  • Business line of credit: Line of credit allows businesses to borrow money when needed and repay it as they go along. It is typically used for short-term needs such as paying bills or purchasing inventory, but it can also be used for larger projects such as buying new equipment or renovating your salon’s interior design scheme.
  • Equipment financing: Equipment financing is one of beauty salons’ most common forms of financing. This type of loan allows you to borrow money based on the value of your salon equipment. You can use this money to buy new chairs or other necessary salon equipment.
  • Merchant cash advance: This short-term loan allows you to get money quickly without having collateral or credit history requirements. It’s ideal for cash flow problems and unexpected expenses such as paying taxes or other bills. Typically, cash advances are based on your future sales.

What are the benefits of getting a beauty salon loan?

Here are some of the benefits of getting a beauty salon loan:

  • Use it for any purpose in your business: The beauty of these loans is that you can use them for any expense related to running your business. You can use it for buying inventory or equipment, paying staff salaries, marketing expenses, or even covering operating expenses until your next payday.
  • Build credit history: If you don’t have much credit history or have had trouble with past payment obligations, getting a small business loan may help build your credit, so other lenders will want to lend to you in the future.
  • Tax benefits: You can earn tax benefits from your state and federal governments. The amount of tax deduction depends on how much money is spent on interest, equipment, labor costs, and other expenses related to running your business.

How can you use a beauty salon loan to grow your business?

Here are some of the ways that a beauty salon loan can help you expand:

  • Hire more stylists: A good hairstylist is hard to find. If you want your salon to succeed, you’ll need a staff of talented hair stylists who can meet the needs of your clients.
  • Open a new location: If there’s an area that could benefit from your services, consider opening a second location or branching out into other areas in your community.
  • Cover marketing expenses: Marketing is one of the most critical parts of growing a business. You need to get the word out about your services, so customers come through your door. This could include advertising (online, print, or radio), public relations, event sponsorships, social media campaigns, and more.
  • Purchase equipment: If you want to increase efficiency and offer your clients a wider range of services, you may need additional equipment such as tanning beds, massage tables, or even new chairs for haircuts.

How to choose the best beauty salon loan

Here are some factors to consider to choose a beauty salon loan:

  • Repayment period: The repayment period of your loan should be appropriate for your needs. A longer repayment period will result in lower monthly payments but higher interest for the life of the loan. A shorter repayment period will have the opposite effect.
  • Interest rate: The interest rate varies from lender to lender which depends on their assessment of you and your business. Interest rates are usually higher if you have bad credit or less than perfect credit history. Usually, if you seem risky to the lender, your interest rate will be higher. Take your time and talk to multiple lenders.
  • Establish a relationship with the lender: When you apply for a loan, try to establish an ongoing relationship with them, so you can negotiate terms that suit your needs better over time.
  • Personal guarantee or collateral: Some loans come with collateral or a guarantee. If you have collateral, such as a car or house, you can get a lot of money without a hassle. However, if you don’t have collateral, you may have to look at other lenders that do not require collateral. You’ll have to weigh the pros and cons in your situation.