Beauty Salon Business Loans

What is a beauty salon loan?

Beauty salon business loans are industry-specific loans offered by traditional and non-traditional lenders to support a range of business needs. It provides funds to manage capital flow, order necessary salon equipment, renovate their site location, hire staff, and more. The best solution for small or growing salons is acquiring the working capital to enhance their endeavors.

First Union is here to help! There are a variety of loan options that can help your beauty salon thrive.

Types of Beauty Salon Business Loans and Financing Options:

Once you've confirmed the need for funds, consider the factors that are most important to you. Business owners should look for loans that offer great interest rates, down payments, and collateral requirements. Here are the more widely used loans to help beauty salons grow.

• SBA Loans: Partly guaranteed by the U.S. Small Business Administration, SBA loans are offered by traditional and non-traditional lenders. The program offers extremely flexible rates and terms ideal for small businesses. There are several variations of SBA loans that can be used by well-established businesses looking to expand.

• To be eligible for SBA loans, businesses must meet the following requirements:

  • Operate for profit
  • Be considered a small business, as defined by the SBA
  • Be engaged in, propose to do business in, the United States or its possessions
  • Used alternative financial resources, including personal assets, before seeking financial assistance
  • Not be delinquent on any existing debt obligations to the U.S. Government

Listed below are the two types of SBA loans that can benefit a small but growing salon.

• SBA 7(a) Loans: 7(a) loans tend to be the most common within the SBA family of loans. With access to up to $5 million in working capital for a term of 25 years, numerous industries find these loan types are undoubtedly adequate for their needs. Interest rates tend to be between 7-8% depending on trade and the nature of your business. Most businesses who opt-in for an SBA loan will fall under this 7(a) category.
• SBA 504/CDC Loans: 504 loans are extremely specific, it provides long-term, fixed-rate financing through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. If your business needs to purchase commercial real estate or perhaps a large piece of equipment, this may be the ideal loan program. The borrower may need to provide up to 20% of the total value, with the SBA kicking in 40% and the lender the rest. This cap on this type of loan is generally $5 million.

• To be eligible for this loan, businesses must meet the following requirements:

  • Have a tangible net worth of less than $15 million
  • Have an average net income of less than $5 million after federal income taxes for two years preceding your application

• Business Lines of Credit: Banks, financial institutions, and other licensed consumer lenders often extend credit to creditworthy customers to address fluctuating cash flow needs.

  At a minimum, lenders will require your business to be operational for at least six months and able to earn $25,000 in revenue. Depending on the lender, a minimum credit score of 500 or higher may be required to qualify. By partnering with non-traditional lenders, companies can obtain their business line of credit within a matter of days.

• Short-Term Business Loans: Short-term loans can be extremely beneficial during a growth period, fluctuating cash flow times, or when there is a need for seasonal purchasing. These loans are designed to meet the immediate financing needs of small to medium-sized businesses looking to enhance their activities. It provides a lump sum upfront to a borrower and has a repayment period ranging from three months to three years.

  At a minimum, lenders will require your business to be operational for at least six months and able to earn $25,000 in revenue. Depending on the lender, a minimum credit score of 500 or higher may be required to qualify. By partnering with non-traditional lenders, companies can obtain their business line of credit within a matter of days.

• Equipment Financing: Equipment loans are used to buy business equipment. Businesses will often need to purchase, replace, repair, or upgrade various kinds of equipment to process, manufacture or produce their products or services.

  Equipment can include things such as phone systems, computer monitors, printers, copiers, salon chairs, styling stations, shampoo chairs and bowl units, specialized machinery, and more. Most lenders will require three years of tax returns for the business, the purchase agreement of the equipment, personal financial statements, and identification of each owner.

How to Apply for Salon Loans: Requirements and Getting Started

If your business has come to a point where funds are needed to generate a greater return of profit, acquiring a small business loan may be the best option.

First Union Lending is here to help.

Submit your business information below to determine if you qualify for any available small business loans. Our Funding Specialists will analyze your qualifications and will reach out to walk you through the next steps.

While each of the loans have varying qualifications, lenders will typically ask for the following general information:

• Business Operations History
• Business Revenue Statements
• Personal & Business Credit Scores
• Collateral if needed

Online lenders like First Union are providing various salons with the funds needed to grow and become successful.

If you have any questions in regards to any salon-related business loans, feel free to give us a call: 863-825-5626

Advantages of Retail Business Loans

Depending on the loan you qualify for, there are many benefits in partnering with an online lender to gain funds for your business initiatives. The funds from these financing options can be used to solve a variety of issues that arise during the day-to-day activities at your business.

It provides the working capital needed to maintain necessary maintenance equipment such as computers, salon chairs, towels, supplies, cleaning supplies, hair clippers, and more. Funds are not limited to purchasing and maintaining equipment, it can be used to renovate and expand a site location.

These funds can be used to enhance your business advertising and onboarding new employees to better streamline your business. These loans can be used to expand your business by purchasing land to build another location, purchasing more storage space for inventory, or paying for a larger location.

These funds can be used to enhance your business to better serve clients in need of your style guidance. Utilizing out-of-pocket funds can be expensive, look to a lender to finance your initiatives and keep your business running.

Choose First Union Lending As Your Premier Lender

At First Union Lending, we have an unwavering belief that small and medium-sized businesses deserve the right to access the capital they need to succeed.

Our goal is to build long-term, lasting relationships by providing business owners with what they need when they need it. We pride ourselves on being educated, knowledgeable, and caring when it comes to how we conduct business. We have voluntarily acquired much of the same licensing required by traditional banks to cement our fiduciary responsibility to our clients and our work culture.

We are here to consult, help you save, and guide you and your business to success.