Best Business Loans for Beauty Salons Explained
This section will give a detailed explanation of the loan types featured in the table above, and how each type of loan relates to the beauty industry. We’ll also discuss the features of each loan type and how a certain loan can help your aspiring or existing beauty salon business.
When you need funds to cover your monthly bills or employee payroll, a business line of credit is the best option. It allows you to borrow a certain amount whenever you need capital. Fortunately, you don’t need to pay interest until you start using the funds.
A business line of credit is excellent if you’re looking for working capital for your beauty salon business. You can use a line of credit to purchase salon equipment and more.
Fundbox is an approved SBA online loan lender. The Fundbox line of credit is calculated in relation to your current beauty salon invoices, turnover, and the risk associated with each invoice. The loan amount that is offered by the Fundbox generally falls between $1000 and $100,000. Fundbox offers short application processes and low minimum credit score requirements.
If you need to purchase equipment, machinery, or technology for your beauty salon business you will likely need an equipment financing loan. With this loan type you’ll receive 100% of the value of the equipment you wish to purchase. The equipment serves as collateral, so you won’t need to worry about your credit score.
You can use equipment financing to purchase the latest salon equipment to keep your business running. If you can’t get a business line of credit loan consider applying for equipment financing.
SmartBiz is among the leading lenders for SBA and construction loans, but they also provide equipment financing. We recommend it due to its high approval rate. Additionally, SmartBiz offers a longer repayment plan.
If you need cash to cover daily operation costs or buy equipment, the business term loan might be right for you. With a business term loan you will receive a sum of money, which you will need to pay back within a specified period of time.
Funding Circle offers the lowest APR rates and few restrictions on loan purposes. Aside from fast approval, Funding Circle provides a dedicated account manager that’ll see you through the loan application process.
Startup business loans provide you with the funds you need to kick-start your business idea and grow your company. Startup business loans can be used for business development, the purchasing of property, marketing, and operating costs.
In some cases, you might need:
- A credit score of 600 or more
- Business active for 11 months or more
Fundera is our choice service for startup loans. If you are applying for a startup loan for your beauty salon, Fundera will likely ask you to provide a business plan. A detailed and accurate business plan may be particularly relevant if you have no previous track record or history to support your application.
A commercial real estate loan is the best solution for beauty salon business owners who want to acquire a physical location to run their businesses. The bank gives you a sum of money that you can use to reshape/purchase a commercial property or land. This type of loan also boasts low interest rates and extended repayment terms.
OnDeck is one of the best online lenders when it comes to commercial mortgage loans. This lender has a lower credit score and lenient borrower requirements. They also offer repayment discounts and flexible payment plans.
Short-term loans are popular with small businesses and large corporations alike. They are easier to get and paying them back doesn’t have to take many years. For beauty salons, getting a small term loan can help improve the company through the purchase of new and more advanced equipment or hiring staff with more experience and knowledge.
Fora Financial offers short-term loans to small businesses with terms of up to 15 months. Payments are flexible and no collateral is needed to qualify for a loan. They also reward companies that pay off their loans with early payoff discounts as low as 10c on the dollar.
Getting a short-term loan from Fora Financial isn’t very technical. The applying business needs to be in business for at least 6 months and earn a minimum of $12,000 in gross sales.