You know just how messy running a salon can be. Not only are you dealing with multiple appointments, you’re also dealing with the backend of ordering supplies, keeping staff happy, and trying to grow your business.
Even successful, profitable salons can experience temporary cash flow challenges or need extra capital to grow. A business loan can give your salon the capital needed to hire additional staff, purchase new equipment, or invest in marketing to attract more clients. When used strategically, funding helps you grow revenue, improve client experience, and expand your business without straining your day-to-day cash flow.
In this article, we’ll explain why salon owners might need a business loan, which types of funding work best, and what you need to qualify. We’ll also share tips for choosing the right lender and getting funded quickly.
When Do Salon Owners Usually Need a Loan?
Salons have ongoing expenses that must be covered regularly. Here are some of the most common reasons why you might benefit from a loan:
- Renovating or upgrading equipment: Salons focus on aesthetics and, as such, also require the establishment to live up to a certain standard. Salon equipment financing can help you buy the quality seats, lighting, and sinks that you need to attract customers.
- Hiring stylists or front desk staff: Experienced stylists typically expect competitive wages, and that doesn’t include front desk staff or assistants. Staffing in salons also comes with challenges like high turnover and seasonal slowdowns, which can disrupt operations. A business loan can help cover wages during these gaps, invest in employee retention programs, or hire additional staff during busy periods to ensure smooth operations and consistent client service.
- Stocking up on haircare or skincare inventory: Besides the products you use as part of your salon services, you might also be selling hair and skin care products. Maintaining inventory, especially for premium products, can eat up a lot of cash. Loans can help you stock a full retail display.
- Covering rent or bills during slow months: Every business has slow months, and access to easy loans will be critical for covering your rent and expenses when business is down.
- Opening a second location or a booth rental expansion: If you hope to one day expand your operations to a region, loans will be essential in making that dream possible.
Loans are not just for emergencies when you need money to bail out of a bad situation. They also can give you the opportunity to grow your business.
What Kind of Business Loan Works Best for a Salon?
Salons tend to have a variety of needs and, as a result, benefit from different types of funding. Here are some common options to consider:
- Working Capital Loans: These are ideal for covering recurring costs like payroll, rent, and utilities. Although these operational costs may seem small compared to the initial setup, they can still add up over time.
- Lines of Credit: If flexible financing is needed, a line of credit allows you to borrow only what you need, when you need it. The key benefit here is that you only pay interest on the amount you borrowed.
- Short-Term Loans: This type of loan is ideal for sudden emergencies or upgrades. Perhaps an expensive piece of equipment broke, and you need a replacement. You can pay back these loans over 3-18 months, depending on the lender.
- Merchant Cash Advances: This option allows for easy funding for salons that have uncertain sales cycles. If sales dip, your payment obligation also dips.
Regardless of what option you choose, the key factor is speed. Lenders like Fast Business Financial understand this and offer loans to match all types of funding needs for your salon
If immediate funding isn’t a priority for you, then other options also exist. Traditional bank loans or Small Business Administration (SBA) microloans can be considered. These may be available for salons with strong credit, but they typically require more paperwork and take longer to fund than alternative loans. You will have to find out the requirements from a bank or an SBA-backed lender to understand the entire procedure.
What You’ll Need to Qualify
Applying for a salon business loan doesn’t have to be intimidating, especially when working with lenders who specialize in small businesses. Generally, you’ll need the following:
- Business and personal financial statements – Profit & Loss statements, balance sheets, and other records help lenders evaluate your cash flow, revenue, and overall financial health.
- Bank statements – Usually 3–6 months of business bank statements to show consistent deposits and expenses.
- Tax returns – Business and personal tax returns for the past 1–3 years, depending on the lender.
- Business plan or funding purpose – A clear explanation of how you intend to use the funds can improve approval chances. Include revenue projections or expected ROI if possible.
- Licenses and permits – Current salon licenses, health permits, or any other required documentation proving your business is legally compliant.
- Credit information – While a strong credit score helps, many lenders also consider sales history, growth potential, and existing cash flow. Perfect credit isn’t always required.
- Proof of income – Even if your revenue is seasonal, lenders want to see that your salon generates consistent income over time.
Having these documents organized and ready in advance can streamline the application process and increase your chances of getting approved quickly.
Tips for Choosing the Right Lender
When you decide to take a loan for your salon, it’s easy to get overwhelmed with all the paperwork and eligibility requirements. This isn’t ideal when you need funding quickly. Here are some factors to keep in mind:
- Choose someone who understands small service-based businesses: Traditional lenders like banks have strict requirements and oftentimes don’t lend unless you meet all their requirements. This is why alternative lenders that work with small businesses can be a better option. They will look at your business as a whole and offer flexible options catered to your needs.
- Avoid lenders with confusing terms or hidden fees: When you apply for a loan, it’s critical to ensure that your lender isn’t trying to scam you. The best way to do this is to read the fine print. If areas like the repayment schedule seem dense, it’s probably a red flag. Always have a clear picture of how much you’ll owe, when you’ll owe it, and how the payment schedule will work.
- Look for speed, transparency, and support: Look for lenders that understand the realities of running a salon. The right lender will offer fast approvals, transparent terms, and reliable support throughout the process.
FAQs
How much can I borrow for my salon business?
Anywhere from $5,000 to $250,000 is the norm. Of course, the exact figure would depend on factors like your monthly revenue, your business history, and the kind of loan you need.
Can I get approved if my credit score isn’t perfect?
Yes, it might be surprising, but alternative lenders like Fast Business Financial look beyond traditional metrics like credit scores. They will assess elements like your cash flow and business experience.
How fast can I get the funds?
If your application is complete and all required documents are ready, such as bank statements, tax returns, and financial statements, approval can be as fast as 24 hours. This is several times faster than traditional banks.
What can I use the funds for?
Typically, loans would go for anything that you need to either upgrade or maintain your salon’s needs. Think payroll, new equipment, and even renovations.
Do I need a business plan to apply?
It’s always ideal to have a business plan since lenders appreciate knowing what the loan will be used for. However, it isn’t a hard requirement.
Get in Touch With Fast Business Financial to Finance Your Salon Today
Need fast funding for your salon? Fast Business Financial offers business loans designed for salon owners like you. They’re simple, flexible, and made to move at your pace. Apply today and get funded as fast as within 24 hours.