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Your Complete Guide to Beauty Salon Financing and Barber Shop Loans

  • Apply in under 2 minutes
  • Get funds as fast as 24 hours
  • Applying won’t impact your credit score
By Erin Ryan Social Community Manager and Senior Writer at Fast Capital 360 Reviewed By Mike Lucas
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Loan Overview

  • Coins stacked on table with blue arrow pointing up
    Loan Amount Up to $500,000
  • Calendar image appearing as though the page is being flipped
    Estimated Repayment Terms 1-5 Years
  • Speedometer icon
    Interest Rate Starting at 7%
  • Dollar sign in circle
    Speed of Funding As fast as 1 day

Hair salons in the U.S. account for $47 billion in revenue, according to research company IBISWorld. Your beauty salon or barber shop contributes to that market share.

But there can come a time when you need a bit of a financial lift to grow your business or get through slow months. That’s when beauty salon financing or a barber shop loan can provide you with crucial capital.

Financing Your Beauty Salon or Barber Shop for Success

According to salon software provider Phorest, nearly 32% of hair and beauty salon owners and barbers indicated that getting new clients is the greatest challenge they face, with 20% saying the same of retaining existing clients.

Lack of clients means lack of revenue, and when that happens, cash-flow shortages can make it difficult to operate the way you’d like. Here are a few reasons you might turn to a business loan for your beauty salon or barber shop.

Buy Equipment

If your hair salon or barber shop is in need of new equipment, financing can help you obtain any of the following and more:

  • Styling chairs
  • Stylist trolleys
  • Color processors
  • Hair dryers
  • Shampoo stations
  • Mirrors
  • Dryer chairs
  • Shelving
  • Point-of-sale system
  • Televisions or audio equipment

Purchase Inventory

Do you need to restock hair dyes, shampoos, conditioners, brushes or other salon products? Whether for your stylists’ needs or for your sales inventory, a small business loan can provide you with capital so you can make bulk purchases.

Cover Rent and Utilities

Let’s say your salon is the size of a modest house. If your rent ranges from $1-$2.5 per square foot, the average rent range for salons, according to TheSalonBusiness.com, that’s a pretty penny. On the low end, a 1,500 square-foot space could cost $1,500 a month and on the high end, $3,750.

Pay Staff

According to TheThrivingStylist.com, in 2020, commission-based salons spend 40% of their budget paying stylists and an additional 5% paying support staff. What’s more, the U.S. Bureau of Labor Statistics noted that the median hourly wage for barbers was $14.50 in May 2019, while hairdressers and stylists earned $12.54. That can add up when months are slow and you have other bills to pay.

Do you need a loan for your small business?

Best Beauty Salon Financing and Barber Shop Loans

Here are a few funding options for your beauty business or barber shop.

Equipment Financing

Beauty salon or barber shop equipment financing can provide you with a one-time infusion of capital to cover your equipment purchase. In some cases, you could be able to finance 100% of the equipment cost.

Business Term Loan

Another option for a one-time infusion of capital is a business term loan. Funds can be used for nearly any business need, and repayment terms can extend several years. Depending on the terms of your beauty or barber shop loan, your installment payments could be daily, weekly or monthly.

SBA Loan

Small Business Administration (SBA) loans are an alternative to conventional business term loans when you need funding for your beauty business. That’s especially true for borrowers who’ve had their loan request denied by banks and are still in search of competitive terms.

Lenders who partner with the government agency are at less risk should a borrower default on a loan they’ve funded. That’s because the SBA guarantees a portion of each loan from a partner lender.

Business Line of Credit

An alternative to a salon or barber shop loan, a business line of credit is a great option if you’re looking for flexible funding you can access continually as needed. Think of occasional bulk supply purchases or emergency expenses.

It works similarly to a credit card: You’re approved for a certain limit and you can tap into it when needed (or not at all). As you repay borrowed funds, your credit is restored proportionate with your repayment, up to your original limit.

Working Capital Loan

If you need a bridge of capital to get you from one month to the next, a working capital loan could be the answer. This type of beauty salon financing is typically meant for short-term expenses, such as one-off rent, payroll or debt payments. As such, they often have quick repayment schedules.

Merchant Cash Advance

A merchant cash advance is an alternative funding solution that can be useful if you need to finance a short-term expense and you need money fast. Funds are advanced based on your beauty or barber shop’s projected revenue. This type of financing is accessible for many business owners, including those with what some lenders might consider “poor credit.”

Estimate terms for every type of financing

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $200,000+
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    Credit Score 560+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $200,000+
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    Credit Score 600+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $75,000+
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    Credit Score 540+

Loan qualifications

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    Time in Business 2+ Years
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    Annual Revenue $160,000+
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    Credit Score 620+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $150,000+
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    Credit Score 600+

Loan qualifications

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    Time in Business 4+ Months
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    Annual Revenue $100,000+
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    Credit Score 500+

Loan qualifications

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    Time in Business 2+ Years
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    Annual Revenue $50,000+
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    Credit Score 650+

Loan qualifications

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    Time in Business 1+ Years
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    Annual Revenue $75,000+
  • icon
    Credit Score 540+

How much do you need?

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    Payments

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          How much do you need?

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          Estimated Interest Rate

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          Loan Term

          Payments

            Total Repayment:
            Cost of Loan:
            This is an estimation tool that provides a range of possibilities depending on creditworthiness and terms selected. Terms can be adjusted to increase or decrease your payment. To see all our loan calculators click here.

            How much do you need?

            Estimated Interest Rate

            %

            Loan Term

            Payments

            Total Repayment:
            Cost of Loan:
            This is an estimation tool that provides a range of possibilities depending on creditworthiness and terms selected. Terms can be adjusted to increase or decrease your payment. To see all our loan calculators click here.

            Where to Find Funding for Your Beauty Business

            When you’re seeking barber shop or beauty salon financing, a big-name bank might first come to mind. After all, when you think banks, you think loans.

            The problem many business owners face with conventional lenders, such as banks, is that the process to apply and get funded can take time, time you might not have to spare. What’s more, these lenders weigh a lot of factors in addition to revenue, including collateral and credit score. Strict minimum requirements often make it difficult to qualify for a bank loan.

            Alternative, nonbank lenders are now on the scene too. They tout hassle-fee applications and fast funding that doesn’t require collateral, sometimes the same day as approval. They also are receptive to borrowers who have what banks might consider “poor credit.” To balance risk, these lending institutions often have shorter repayment terms and less competitive rates.


            What You Need to Apply for Beauty Salon Financing or a Barber Shop Loan

            With Fast Capital 360, you can seek funding for your beauty business or barber shop with the following:

            Minimum Requirements:

            • 500+ FICO score
            • 6 months in business
            • Annual revenue of $120,000

            What You’ll Need to Get Started:

            • Basic information about your business and yourself
            • 6 most recent monthly bank statements

            Apply With Fast Capital 360

            We pride ourselves on providing the best experience for our customers.

            Here’s how you’ll benefit:

            Quick and Easy Application

            You can complete our simple online application in just a few minutes.

            Multiple Offers

            Your single application gets you in front of our network of lending partners, which means you get more offers to comb through.

            Expert Advice

            A Fast Capital 360 Business Advisor will connect with you to review your offers, answer any questions and guide you through the funding process.

            One application. Multiple loan offers.

            Quickly compare loan offers from multiple lenders without impacting your credit score.

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