Beauty Salon Loans

The Beauty Salon industry is a growing component of the Economy, with nearly 1.1 million beauty salons and spas in the U.S representing around $45 billion in annual sales.

The Beauty industry has been especially beneficial to women and minority entrepreneurs, as 61% of all beauty salons are women-owned businesses (as opposed to 30% of private sector small businesses). Another 21% of beauty salons are owned African Americans, and 17% of beauty salons are small businesses owned by Asian Americans.

The Beauty Salon industry is a growing component of the Economy, with nearly 1.1 million beauty salons and spas in the U.S representing around $45 billion in annual sales.

The Beauty industry has been especially beneficial to women and minority entrepreneurs, as 61% of all beauty salons are women-owned businesses (as opposed to 30% of private sector small businesses). Another 21% of beauty salons are owned African Americans, and 17% of beauty salons are small businesses owned by Asian Americans.

Beauty salons are also an important job-creator, as 1.2 million professionals work in the personal appearance industry. Job growth has been steadily increasing in the industry, as beauty salon job growth has outperformed the overall economy in 11 of the past 13 years. Even more, the Bureau of Labor Statistics projects job growth in the beauty salon industry to increase by 15% over the next decade.

With growth in the industry, small business owners in the beauty industry will find the need to expand the size of their facilities, along with hire new staff and buy new equipment and supplies. What are the types of business loans available for beauty salon owners?

Low rates and flexible terms make getting a small business term loan or business line-of-credit from a bank the most preferable of beauty salon financing options. But you’ll need great credit, as banks have stringent credit requirements to get a commercial loan.

SBA loans for your beauty salon may be a great financing option, as an SBA loan has rates around 6-8% with terms up to 25 years. SBA loans are helpful for small business owners who have credit that just barely disqualifies them for a traditional bank loan, as the SBA guarantees a percentage of the risk the bank takes in funding the beauty salon loan.

If you don’t quality for a traditional bank loan, you may be able to qualify for an mid prime alternative business loan. If you have a credit score above 600, you could get a mid prime alternative loan for your beauty salon, with rates in the 10-20% range, with terms between 18 months and 5 years.

As a beauty salon owner you may find yourself needing quick cash to purchase equipment, inventory or other working capital. If you need a fast business loan for a beauty salon then maybe a business advance (or merchant cash advance) is the right funding choice for your salon. Bad credit is OK for these types of loans, but the interest rates can be extremely high.