People Also Ask:
What Types of Beauty Salons & Spas Can Get Business Loans?
Business loans are available for all sorts of salons, including (but not limited to):
- Hair salons
- Nail salons
- Massage studios
- Tanning studios
- Waxing/hair removal centers
- Facials/skincare treatment centers
How Do You Qualify for Beauty Salon Business Loans?
This depends on where you apply and the product you have in mind. If you’re looking for a bank loan, you’ll need excellent credit, perfect cash flow, collateral, plenty of money in the bank, high annual revenue, and at least two years in business.
Products from companies like United Capital Source are much more accessible. Your ability to meet the requirements mentioned above will determine your borrowing amount, rates, and terms. But falling short in any (or more than one) of these areas won’t stop you from qualifying from multiple products. With some products, your credit score is practically irrelevant. For example, eligibility for a Merchant Cash Advance is based entirely on the size and volume of your debit and credit card sales.
What Are The Best Business Loans for Beauty Salons?
For some salons, their biggest challenge is the constant need for new equipment or supplies. For others, it’s the ups and downs in demand or the post-holiday slump. A Business Line of Credit can solve both of these common dilemmas. This is the perfect business financing tool for businesses that face sporadic and unpredictable cash flow issues. You can draw from your credit line at any time, and once you pay back what you borrow, that money becomes available again. Thus, you don’t have to continuously apply for funding whenever demand drops or a new expense arises.
A Business Line of Credit is best for businesses that just need a little extra cash here and there, as opposed to companies looking to finance large-scale investments.
Do Beauty Salon Business Loans Require Collateral?
The only Beauty Salon Business Loan that typically requires collateral is Equipment Financing. You would be using the equipment as collateral to borrow an amount that is roughly equal to the equipment’s value. And when we say “roughly,” we mean “slightly lower.” After all, the business loan provider probably won’t be able to sell the collateral for the same amount in which it was purchased. For this reason, $10,000 worth of collateral might be able to get you a $6,000 – $7,000 loan.
Also, while collateral is not required for the other options, providing it may offset issues with credit or cash flow that would have otherwise resulted in higher rates or lower borrowing amounts. But, before assuming you can provide collateral, contact the business loan provider to make sure your type of collateral is accepted.
Can I Get a Beauty Salon Business Loan With Bad Credit?
Yes, five out of the seven products mentioned above are accessible for borrowers with bad credit. Your rates may be higher, and your terms may be shorter because bad credit makes you more likely to default. However, if you have strong cash flow or can provide collateral, your bad credit may have less of an impact on your rates and terms.
The only two products that are not accessible with bad credit are Business Term Loans and SBA Loans. These products carry high borrowing limits, low rates, and long terms. The other five products usually carry shorter terms and are much easier to repay. We can also customize your terms and payment frequency to ensure that you can make payments while staying current on other bills.