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Hair Salon Financing: 6 Options for Your Business

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After years of standing behind the chair, hairstylists often want to jump into business ownership and establish their own salon. These independent salons are usually small businesses, and it could be difficult for owners to secure the necessary financing to get the operation off the ground. While traditional banks may be hesitant to lend to a first-time salon owner, alternative business lenders may be able to provide solutions.

The hair salon industry reached $46 billion in revenue in 2018, according to IBISWorld. There are 996,338 hair salon businesses in the U.S., employing nearly 1.4 million people. When opening a hair salon, the startup costs could add up quickly. Licenses, equipment, repairs, maintenance, rent and utilities are among the operating expenses you’ll regularly pay.

If your costs rise faster than your revenue, hair salon financing could help you make ends meet to keep your business running.

Where to find hair salon financing

We’ve compiled a list of lenders who could provide financial assistance for your salon. These online lenders cater to salon businesses and offer financing options up to $500,000. They offer a range of funding options, including short-term loans, business lines of credit, working capital and Small Business Administration (SBA) loans. These lenders have credit requirements below 700 and ask for six months to two years in business.

What to consider before applying

A business lender would likely look at your revenue, credit score and time in business before approving you for financing. Before applying, make sure you’re ready to present the following information about your business:

  • Personal credit history
  • Business plan
  • Balance sheet
  • Cash flow history and projections
  • Accounts payable
  • Collateral
  • Your investment in the business

Not all lenders require the same information, but it’s best to be prepared before moving forward with the application process with any lender, including the options we’ll explore below.

BFS Capital

BFS Capital provides loans for salon and spa owners to cover expenses like renovations and expansions, staff training, license renewal fees, marketing and seasonal cash flow. Salon equipment financing is also available. Loan amounts range from $5,000 to $500,000.

BFS Capital considers a business’s overall health when approving borrowers, rather than specific requirements like minimum credit score. However, BFS Capital does prefer good credit and requires two years in business, a positive daily bank account balance and no tax liens, bankruptcies or open judgements. After applying online, you could be approved in 24 hours and receive funding in as little as two business days.

National Funding

National Funding offers business loans from $10,000 to $500,000 for salons, spas, barbershops and stylists. You could use a loan to pay for equipment, supplies, payroll, insurance, maintenance and marketing, among other expenses.

To qualify, you would need $100,000 in annual sales, a personal credit score of at least 500 and at least one year in business. You could be approved in as little as 24 hours and receive funding the next day.


Kabbage’s business line of credit is available for salon owners and beauty professionals, from $2,000 to $250,000. You could draw from your line of credit as you need funding to pay for rent, equipment, staff, inventory and marketing materials.

Kabbage requires one year in business and at least $3,000 in monthly revenue.


You could use a line of credit or a short-term business loan from OnDeck to cover salon expenses. Loans are available in amounts ranging from $5,000 to $250,000 with repayment terms from 3 to 24 months. You could receive funds in one to three days after being approved.

For smaller financing needs, OnDeck’s line of credit is available up to $100,000 with weekly repayment terms. OnDeck could also fund a line of credit in one to three days after approval.

To qualify for a loan or line of credit, OnDeck requires one year in business, at least $100,00 in annual revenue and a personal credit score of at least 600.


Credibly offers business loans to cover salon upgrades, new staff, training courses for stylists and daily working capital. Credibly’s working capital loans are available up to $400,000 with 3– to 15-month repayment terms. You could be approved in 24 hours and receive funding the same day.

Credibly requires at least six months in business, a personal credit score of at least 500 and at least $15,000 in average monthly bank deposits.


Loans from the Small Business Administration are desirable for business owners because of their low rates and long repayment terms. SmartBiz can provide SBA loans for salon owners, so you don’t have to go through the lengthy application process at a traditional bank.

You could use an SBA loan from SmartBiz to purchase or upgrade equipment, add products, increase marketing, hire staff, cover working capital needs or refinance existing debt. SmartBiz offers working capital SBA loans from $30,000 to $5,000,000 with repayment terms up to 10 years.

To qualify, you would need two years in business, a personal credit score above 650 and enough cash flow to support loan payments.

Costs of running a hair salon

From designing and decorating the space to purchasing supplies for stylists, salon expenses can pile up. And it may take a while to recoup your initial costs, as a small amount from each client goes back into the salon after paying for hair products and the stylists’ earnings. Here are a few expenses to expect when operating a hair salon:


Your building could become your biggest expense, especially if you build out a brand-new space. You would need to outfit the building with plumbing systems, storage space and air conditioning units. Purchasing an existing salon would be a more cost-efficient option. To help with budgeting, expect to spend $125 to $200 per square foot of the salon.


Furniture and equipment would consume a large portion of your budget as well. You would need stylist stations, chairs, mirrors, shampoo bowls, light fixtures and couches for the reception area. The amount you spend on furniture would depend on how simple or extravagant you want the salon to appear.

Staff training

Although stylists would likely come to you with prior education and certification, you may want them to take additional training courses to meet your personal standards. You may need to cover their training while providing wages and other benefits. It could be costly to pay for stylists’ education, but it would benefit your business in the long run as they start providing a higher quality of service and more advanced styling packages.

The bottom line

Opening an independent salon could be a dream come true for stylists. You would be able to set your own hours and design the space to match your individual aesthetic.

However, the cost of running the business could be higher than you anticipated. If you’re unable to qualify for traditional bank financing as a new small business owner, you could turn to alternative business lenders to provide much-needed funding. Many online lenders cater to businesses in the beauty industry and would be able to accommodate your specific needs.

When searching for financing, be sure to shop around to find the right loan for your business. You would want a repayment schedule that your business can keep up with and an interest rate that you can afford. Wait for an offer you’re comfortable with before accepting the financing for your hair salon.

The rates and fees mentioned in this article are accurate as of the date of publishing.


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