Best Beauty Salon Loans
If you’re a hairdresser or nail stylist looking to open or expand your own business, beauty salon loans may help you get the funding you need. Beauty trends may come and go, but these business funding options and solutions stay in style. Whether you’re just starting out with a brand new beauty salon or you’re a veteran business owner, these loan options may be able to help you grow your business or just help make ends meet until the next prom season.
Best beauty salon loans
No matter whether you’re just starting out or you’re a longtime beauty salon owner, we’ve rounded up some of the best beauty salon loans to choose from for your business funding needs.
| Lender | Best for | Maximum amount | Terms | Minimum credit score |
|---|---|---|---|---|
| SBA | Existing salon owners | $5,000,000 | 120 to 300 months | 680 (recommended) |
| National Funding | Equipment loans | $150,000 | 24 to 60 months | 600 |
| Fundbox | Inventory purchases | $150,000 | 3 or 6 months | 600 |
| OnDeck | Cash flow gaps | $250,000 | Up to 24 months | 625 |
| Fora Financial | Bad credit | $1,500,000 | 4 to 18 months | 570 |
Learn more about how we chose our picks.
SBA: Best for existing salons
| Term length | 120 to 300 months |
| Max. amount | $5,000,000 |
| Est. interest rate |
|
| Min. credit score | 680 |
| Min. time in business | Typically 2 to 3 years but sometimes fewer |
Pros and cons
- High loan amounts
- Can be used for a variety of uses
- Stricter eligibility requirements
- Can come with prepayment penalties
Because of the stricter eligibility criteria and longer times to funding, SBA loans are better suited for more established owners than those just starting out. Salon owners may find SBA 7(a) loans with a maximum loan amount of $5,000,000 flexible enough to fund a wide range of different expenses, including inventory. Or, if you’re looking for salon financing to purchase equipment and real estate, the SBA 504 loan could be a good option for fixed assets. If you’ve been in business less than two years but still want to explore SBA loan options, microloans offer amounts less than $50,000 but could be accessible.
National Funding: Best for equipment loans
| Term length | 24 to 60 months |
| Max. amount | $150,000 |
| Starting rate | 4.99% simple interest |
| Min. credit score | 600 |
| Min. time in business | 6 months |
Pros and cons
- Can receive funding within 24 hours upon approval
- Only 6 months in business required
- Origination fee of 1.00% to 2.00%
- Must have a minimum annual revenue of $250,000
With interest rates on the lower side and fast funding timelines, National Funding could be a good option for beauty salon owners looking for equipment loans. The maximum loan amount that can be borrowed isn’t very high but can be used for both new and used salon equipment purchases. National Funding’s eligibility requirements are fairly accessible, too, making it a viable option for newer businesses that have only been up and running for six months — so long as your credit score is 600 or higher. However, a salon must have a minimum of $250,000 annual revenue to qualify which can be steep for brand-new businesses.
Fundbox: Best for inventory purchases
| Term length | 3 or 6 months |
| Max. amount | $150,000 |
| Starting rate | 4.66% for 3 months or 8.99% for 6 months |
| Min. credit score | 600 |
| Min. time in business | 3 months to 6 months |
Pros and cons
- Good for new businesses that have only been running for 3 to 6 months
- No prepayment penalties
- Repayment terms are short
- $6 late payment fees or non-sufficient fund fees
A business line of credit can be better suited for inventory purchases because, unlike a term loan where you get one lump sum of money at once, a line of credit allows you to redraw funds after repayment so you take what you want when you need it.Fundbox’s business line of credit can be a good option for salon owners looking to purchase inventory. Borrowers can receive up to $150,000 and choose from a repayment term of either three or six months. If you choose to pay off early, there are no penalties. Plus, businesses only need to be operating for three months, so even startups may be eligible.
OnDeck: Best for cash flow gaps
| Term length | Up to 24 months |
| Max. amount | $250,000 |
| Starting rate | 27.20% APR |
| Min. credit score | 625 |
| Min. time in business | 1 year |
Pros and cons
- Large borrowing amounts
- Funding can be as fast as the same business day
- Origination fee of 0.00% to 4.00%
- High starting interest rate of 27.20% APR
OnDeck’s term loan has a maximum amount of $250,000 and fast funding, which can make it the best option for beauty salon owners looking to cover cash flow gaps. With a maximum repayment term of 24 months, OnDeck’s loans would be well suited to help cover short-term operating expenses. However, the interest rates are high, and you have to be in business for at least a year making at least $100,000 annually which means this option is better for more established beauty salons.
Fora Financial: Best for bad credit
| Term length | 4 to 18 months |
| Max. amount | $1,500,000 |
| Est. rate | 1.15 to 1.40 factor rate |
| Min. credit score | 570 |
| Min. time in business | 6 months |
Pros and cons
- Borrowers can qualify with poor credit
- Only 6 months in business required
- Origination fee of the greater of $300 or 3.00% of the loan amount
- Can take up to three business days to receive funding
If you’re a beauty salon owner with bad credit, Fora Financial’s loan offerings might be the right option. With its low minimum credit score of 570, Fora Financial makes its term loans accessible for business owners with checkered credit histories, as well as new businesses that have only been operating for six months. However, the trade-off to relatively lax borrower qualifications is higher borrowing costs with shorter repayment terms; Fora charges factor rates, which means you’ll have to multiply the loan amount by the factor rate to determine your total borrowing costs. You’ll also have to wait longer to receive funds, as it can take up to three business days for the money to get into your account after approval.
How we chose our picks
To appear on our list of best beauty salon loans, we selected options that would be available to beauty salon business owners at various stages of business growth, taking into account various credit profiles, time in business, loan purposes and annual revenue requirements.
When starting a salon business, you’ll not only need a background as a stylist but you’ll need the money to rent or buy a physical location, hire employees and obtain the necessary equipment. It can be rather costly, and you may need additional funding from a loan or line of credit with a lender. To receive funding, there will be certain eligibility requirements to follow. You will also need a solid business plan to create a strategy for operating and a salon structure to determine whether your stylists will be categorized as independent contractors or employees
Frequently asked questions
Newer businesses that may not qualify for business loans from traditional brick-and-mortar banks may consider alternative online lenders as funding sources. Alternative lenders can be more lenient when it comes to eligibility requirements for their products, sometimes only requiring a business to be in operation for a few months, and a borrower may even be eligible with fair to low credit. However, online lenders may prioritize annual revenue and profitability over credit history.
The credit score requirement to get a beauty salon loan will depend on each lender. However, while a traditional bank lender may require a strong score, an alternative online lender may only ask for fair credit, with some offering products to those with low scores. On average, an alternative lender may require a small business owner to have a score of anywhere from 600 to 650 to qualify for its products, but some like Fora Financial, only ask for a score of 500.
Yes, a hairstylist can get an SBA loan to help with salon financing. However, this type of loan is better suited for existing salon owners due to its strict eligibility requirements and funding timeline. To receive an SBA loan, you’ll likely need a credit score of around 680. While minimum time in business, annual revenue and cash flow may also come into play, there are other deciding factors, such as meeting the SBA’s small business size standards that vary in each industry. Some SBA loans also require a down payment and collateral to qualify for funding.
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