Everything You Need to Know About Hair Salon Financingby Ally Jamson Business Professional
Over the past year, the hair salon industry has been severely impacted by the COVID-19 pandemic. Due to this, many hair salons and spa owners have pursued small business financing to keep their businesses afloat.
No matter for what reasons you require extra working capital for your hair salon, it’s vital to define your needs before approaching a lender. The best loan option for your salon depends on what you need the funds for. Additionally, lenders usually want to know why you need money, how much you need and how you’re going to use the borrowed amount.
Uses of Hair Salon Financing
Hire More Employees
You can’t bring out the best of your hair salon if you don’t have enough employees. Without experienced and skilled stylists to serve your customers, it’s impossible to take your business ahead.
Moreover, the already employed stylists who are managing a lot of work can hurt the quality of service. With a hair salon loan in the form of a small business loan, you can cover the cost of hiring more employees, boost your productivity and provide better services to your customers.
Expand Your Location
If your hair salon business is growing and you want to open a new location to expand your business, you’ll definitely need some extra cash to convert that dream into reality.
A hair salon financing will help you use the loan amount to cover the cost of the new space, equipment, employees, and other expenses.
From salon chairs to shampoo bowls, dryers, mats, hair accessories, carts, trolleys, product display areas, and more, you require a lot of innovative equipment to successfully run your hair salon. Equipment financing is specially designed for purchasing equipment for small businesses including hair salons and spas.
Moreover, you may need health and safety equipment for your hair salon during this tough and wired time. As a hair salon owner, you can use equipment financing to purchase face shields, air purifiers, sanitizers, masks, and other safety measures. If your salon is struggling to buy the equipment, it may be the right time to apply for an equipment hair salon loan.
Marketing and Advertising Hair Salon
If you want to make a unique selling proposition and stay ahead of your competitors, you must market and advertise your hair salon. However, it takes a lot of money to advertise and market your small business.
Though there are numerous benefits of marketing, most hair salon owners usually don’t have sufficient funds to cover this huge cost. A hair salon loan helps such small business owners to successfully advertise their business to their targeted customers and ultimately boost their sales and revenue.
Cover Day-to-Day Expenses
From paying wages to rent, bills, and utilities, hair salon financing helps you cover a variety of day-to-day and other short-term business expenses.
There are some working capital loans for hair salons that offer immediate access to cash to hair salon owners so they can keep their business afloat during slow months and unexpected times.
Types of Small Business Loans for Hair Salons and Spas
SBA 7 (a) Loan
Loan Amount - Up to $5 million
Interest Rates - As low as 7%
Repayment Terms - 5-30 years
Loan Amount - Up to $50,000
Interest Rates - 8% -13%
Repayment Terms - Up to 6 years
Business Lines of Credit
Loan Amount - Up to $500,000
Interest Rates - 8% -24%
Repayment Terms - 1-2 years
Loan Amount - 80%-90% of the equipment value
Interest Rates - As low as 8%
Repayment Terms - 1-5 years
Other Hair Salon Financing
● Business credit cards
● Merchant cash advances
● Working capital loans
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How to Apply for Hair Salon Financing
After deciding your funding needs, researching and applying for a hair salon loan is very simple. Depending on your current financial needs, you can apply for one of the above loan options.
You can apply through a traditional bank, credit union, or online alternative lender. While the traditional banks have the most complicated approval process, you can get easy and fast funding with an alternative lender.
Besides, you can use an online lending marketplace to find and compare the best hair salon loan offers from multiple lenders. You can compare loans for interest rates, repayment terms, loan amount, and more and choose one that best fits your current financial needs and budget.
After you’ve finalized your lender and loan type, make sure to collect all the important financial documents you need to complete the application. Ask your lenders questions and try to respond quickly to avoid any delay in your loan.
Created on Mar 15th 2021 05:29. Viewed 113 times.