5 Steps For Getting A Business Loan With Bad Credit For A Spa
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How frustrating! Here you are, trying to grow your spa business. But you’ve managed to get into credit trouble. And that bad credit is taking a big bite out of your growth plans. If only you had time for a massage, you could relieve some of the stress. But first, it’s time to take a good, hard look at ways you can still get small business loans for salons/spas to build your business. Even with bad credit.


You’ve worked hard to create a warm, welcoming environment for your spa patrons. They come to be pampered, and they hate to leave. You offer a wonderful array of retail products, and they sell well. Yet you have financial problems. You aren’t alone. Small businesses often suffer from:

  • Insufficient cash reserves
  • Failure to correctly predict cash flow
  • Failure to understand your target market and their buying habits
  • Improper pricing of services and products

Are you struggling to repay current business loans? Maybe you borrowed too much, so the payments are high. Maybe you ran up the balances on your business line of credit and credit cards. Now, these payments are just too much. Maybe you had a run of bad luck. Multiple emergency repairs dried up your cash. Whatever the reason, you’re falling behind.

Or perhaps the problem is revenue. Things look good on paper, but your spa is not earning enough. Or your cash flow is erratic. This can come from inefficient use of space or staff time. Some weeks you’re booked solid, some weeks are slow.

Stand-alone spas don’t have the luxury of relying on a business “parent” such as a hotel or medical clinic. You’re on your own when it comes to managing your spa. Even with bad credit, though, you can get help from the right business loan.


Dun & Bradstreet (D&B) is the foremost business credit reporting agency. They say, “Establishing good business credit scores can be crucial to gaining the trust of both financial institutions and other businesses.” Start by learning the building blocks of good credit.

Then ask yourself: is bad credit really the problem? Small business owners are often turned down for bank loans. But lenders don’t always reveal the reason. If your spa has been denied, ask why. You can’t fix the problem until you’re sure what it is.

Make sure your business and personal finances are separated. This is important for you as well as your spa.


American Spa says every stand-alone spa needs a financial check-up. “You need to identify your financial ratios and set a goal to trim your compensation, while increasing capacity and volume, in order to improve your profit margin. . . To know your ratios, you need a budget to use as a financial blueprint to guide you. You can’t maximize your business without a budget.” A budget also shows potential lenders what you’re doing to improve your business credit.

What else can you do?

  • Try to pay your bills on time, advises D&B. And note that their PAYDEX® Score is dollar-weighted. “If you’re unable to pay off all your debts in a timely manner, consider starting with the largest invoices.” They also suggest you submit trade references to them. As suppliers report your timely payments, that helps build better credit.
  • Consider a small business loan to consolidate your debts.
  • Tighten your belt. Controlling your costs gives you more working capital.
  • Get business credit card use under control. Don’t get rid of the cards. Those open accounts give you available cash. But use them sparingly, so you can pay the balances quickly. This is one of the best ways you can boost your credit profile. It shows you’re a responsible borrower.
  • Indulge in paperwork. You don’t need formal business and marketing plans to apply for bad credit business loans. But let’s be positive here. One day you may want to open and equip a second location. You’ll need a conventional bank or SBA-backed loan. The better organized you are now, the better prepared you will be then. And having a plan will help you stay on track for credit repair.
  • Don’t borrow more than you need. You’ll have more to repay. That puts more pressure on your credit situation.


Did you know that small business loans can help improve your spa’s credit score? The vast majority of your patrons pay with cash or credit cards. This makes your spa a good candidate for certain types of financing. Current, consistent revenue can trump past poor credit. One example is merchant cash advance.

Merchant cash advance is an option based on credit and debit card sales. A merchant lender will give you cash in return for a percentage of your future electronic transactions. You’ll agree to the percentage. That will automatically take their cut off the top, before you even see the deposit. This makes repayment affordable, because it rides with your sales. If you have a big day (or week), the lender will receive more. If you have a slow period, they’ll get less. How much you can borrow depends on your average transaction amount.

There are other small business loans that don’t require good credit. They don’t require collateral. Or a personal guarantee. Paperwork is minimal. And you can get funded right away. You can use this money to get over a short-term hurdle, and get back on track financially.


Here at UCS, our mission is helping small businesses grow and prosper. We know your financial challenges. How easy it can be to slip into bad credit. We’re here to help you get past that – not just make a loan deal. We’ll match you with the best business financing for your current needs. And make sure it’s in your best long-term interests, too.

Here’s my best advice: Don’t wait to start improving your business credit! It will only get worse. At some point we won’t be able to help you with small business loans. And that’s the last thing I want to see happen. So let’s talk now, and get you started on a spa credit turnaround.

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