Beauty Salon Loans

What are the pros and cons of beauty salon business loans?

PROS

• You’ll have the money you need right away without having to save and potentially lose out on business in the meantime
• It’ll help you build credit
• Help you keep a healthy amount of working capital
• You can take advantage of time-limited opportunities
• You can ensure your business keeps up with the latest trends and fashion

CONS

• Many business loans are difficult to qualify for
• Interest costs and late fees can set you back significantly if you’re not careful
• Loans are difficult to get if you’ve been in business for less than 2 years
• You may be required to make a personal guarantee

How much does financing a beauty salon cost?

How much you’ll pay for financing depends on your interest rate. Make sure you calculate exactly how much interest you’ll pay over the term of the loan, especially if you’re paying for equipment that may depreciate in value.

Also make sure you look into any fees associated with getting your loan. Many loans are fee-free, but some will charge you early repayment fees, establishment fees, and more.

Beauty salon loan calculator

How can I qualify for a beauty salon loan?

Here are three major things you’ll need to do to qualify for a business loan for your salon:

Ensure you have a credit score over 600, and if you don’t, build your credit score as an individual and a business owner before you apply for a large loan. Personal credit scores demonstrate a borrower’s ability manage debt, so it will be one of the biggest deciding factors for many forms of financing.

Have proof of revenue for the past 1-2 years. Most lenders require a current minimum annual revenue of $50,000 - $100,000.

Have all your documents ready. Here are some of the financial and legal documents you may need for a small-business loan:

• Personal and business income tax returns
• Personal and business bank statements
• Your driver’s license or a photo of some other valid ID
• Commercial leases
• Business licenses and articles of incorporation
• Proof of business experience or, if you’ve got a limited operating history, financial projections

Make sure you read a lender’s requirements carefully before you apply, as while many lenders offering the same type of loan have the same requirements, some do differ.

How can I apply for a beauty salon loan?

Once you’ve decided that a beauty salon loan is right for you, it’s time to start comparing loans. Once you’ve compared loans and found a lender whose terms will work for you, you can start applying. You will usually need to provide your bank statements, tax return details, and business plan, so have these to hand before you begin the process. Lenders will look at your business credit score and some lenders will also review your personal credit report.

You can improve your chances of qualifying straight away by preparing a sound business plan. You should be able to show your lender exactly how you plan to use the loan and how you plan to pay it back. If you’re not sure how to prepare a business plan to apply for financing, there are professional business plan writers you can work with who will help you put your best foot forward.

Apply for a beauty salon loan online

As with any loan or other financial decision, you need to assess your options carefully. It’s important to consider all elements of taking out a salon loan before you make any decisions. Don’t jump into any situation until you’re sure you’ll be able to make regular repayments and don’t take out a loan to get yourself out of further debt.

When you’re ready to apply, compare the best beauty salon loans here and find the one that works best for your circumstances. When you’ve chosen the right loan for you, all you need to do is apply. You’ll soon have the funding you need to grow your beauty salon.