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beauty salon loans

The Best Beauty Salon Loans for 2021

Are you building or buying a new salon, or do you want to expand an existing salon business? A small business loan can help you start a new beauty salon and invest in the latest equipment. When sourcing the best beauty salon funds, it’s best to go for industry-specific loans, as they will give you lower interest rates and improved repayment plans.

Financially reviewed by: Gordon Scott

At A Glance — Starting your dream beauty salon isn’t an easy task and you will require funds to make your vision a reality. The amount of capital you will need depends on the anticipated size of your business. This detailed guide discusses the best beauty salon loan options, the features of these loans, and how to apply.  

The 6 Top Beauty Salon Loans - Summarized

This section will discuss the best financing solutions available for beauty business loans. 

Financing Need

Best Loan Type

Loan Features 

Recommended Option

Supplies & inventory

Business line of credit

  • Amount up to $500,000
  • Up to 24 hours
  • Interest rate between 7% and 25%
  • Loan term between 3 and 18 months

Fundbox

Salon equipment

Equipment financing

  • Up to 100% of the equipment value
  • Loan term up to six years
  • Interest rates from 4% to 40%
  • Up to two days
  • Loan amounts up to $500,000 are available

SmartBiz

Equipment lease payment

Business term loans

  • Between $2,500 and $250,000
  • APR is from 14%
  • Repayment term of 3 to 18 months
  • Time to receive the loan: Up to 24 hours

Funding Circle

Startup capital

Startup business loans

  • Interest rate between 10% and 28%
  • Up to 24 hours

Fundera

Physical location

Commercial real estate loans

  • The loan amount varies depending on the value of the property
  • Time to receive the loan 

OnDeck

Buy new equipment, make renovations, hire qualified staff

Short-term loans

  • Amount: Between $5,000 and 500,000
  • Term: Up to 15 months
  • Interest: No interest rate, instead offers one-time factor rate 
  • Time to get the loan: Up to 24 hours

Fora Financial

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.

1. Fundbox - Best for Business Line of Credit

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.

fundbox

2. SmartBiz - Best for Equipment Financing

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. 

3. Funding Circle - Best for Short-Term Loan

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. 

4. Fundera - Best for Startup Business Loan

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:

  • Collateral
  • 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. 

5. OnDeck - Commercial Real Estate Loan

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.

6. Fora Financial - Best for Short-term Loans

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.

Recommended Reading: Best Loans for Opening a Bar

What Are Beauty Salons Loans?

Beauty salon loans are loans that specifically help beauty salon entrepreneurs finance their business. This can be a secured or unsecured loan, an SBA loan, a line of credit, or a commercial real estate loan. 

There are various loans for various business situations and the different stages of business that your salon may currently be in. Certain loans do not need collateral, while others require this. Some loans are granted based on personal credit score, while others are based on your annual revenue.

What Can You Use A Beauty Salon Loan For? 

You can use beauty salon loans for buying commercial real estate, buying new equipment, funding payroll, providing working capital, or to help with various other business-related costs. 

What Is the Minimum Credit Score Needed To Receive a Beauty Salon Loan? 

This will vary from lender to lender. For instance, certain traditional banks need you to have a credit score of over 650. Other alternative funding lenders may have lower score demands, and some may not make their lending decisions according to your credit score. 

Many lenders will take your personal credit score into consideration, unless you have an established Employer Identification Number (EIN) with its own history of credit. Specific lenders will take both your EIN score and personal credit score into consideration. Most of the lenders we covered above will look at your personal credit scores and the revenue of your beauty salon business. 

Recommended Reading: Best Manufacturing Business Loans

What Loans Types Can Beauty Salon Owners Qualify For?

Beauty salon owners can apply for various loan types, in keeping with the legal structure of their business. For instance, being a LLC, or a sole proprietor, or a corporation can influence the type of loans you can apply for. 

There are several loan types for beauty salon businesses, such as long-term loans, short-term loans, SBA loans, commercial real estate loans, secured loans, credit cards, lines of credit, and equipment loans. 

Can I Get a Salon Loan Without Putting Money Down?

Certain types of funding for your salon business, including lines of credit, business credit cards, term loans, and equipment financing don’t need a down-payment. Yet, in certain instances, a blanket lien or personal guarantee could be needed before you can receive funding. Make sure you carefully read the terms of your contract before you sign anything. 

Recommended Reading: Best Bed and Breakfast Business Loans

Can A Salon Business Qualify For A Grant?

Yes. There are grants available for beauty salon businesses. Yet, grants are generally highly competitive and come with many requirements. In fact, only a fraction of applicants are awarded grants and applicants have to weigh the opportunity cost of time and effort when applying.

See Our Additional Guides on Industry-Specific Loans

The Bottom Line

Choosing the best loan option for your beauty salon business can be a daunting task. Besides considering the approval time, loan amount, and interest rates you want, you should also make sure that the loan you select meets all of your business requirements.   

Make sure that you are happy with the repayment terms before choosing a loan provider. This will help you avoid breaching the agreement. A breach of agreement may lead to penalties. 

In this article our experts outlined the top loan options for your beauty salon business. Now all you need to do is choose the best loan for your specific beauty salon needs. Best of luck!