Deciding to purchase real estate or an existing business is perhaps the biggest decision of all when it comes to financing your new beauty salon or day spa. Since the success of a salon or spa is largely based on location, it’s in everyone’s interest to consider ownership of the land and building that houses your salon.

There are several different loan products for financing a salon or day spa:

  • SBA (7)a Loan
  • SBA 504 Loan
  • Conventional Bank Loan
  • Bridge Loans

Small Business Administration (SBA) Loans

SBA loans can be difficult to qualify for and require that the borrower submit a lot of extra paperwork. However, the SBA loan program may be an ideal option for financing your salon or spa.

PHD Financial may likely look first to an SBA(7a) loan for your business.

This program has features that align well with the needs of the beauty industry professional, including its maximum loan amounts, repayment horizons, interest rates, and flexibility in the use of funds.

What to expect:

  • Loan Amounts: Up to $5 million
  • Repayment Term: 5 to 25 years
  • Interest Rates: Starting at 6.75%
  • Time for Approval: Approximately 6 weeks

Conventional Bank Loans for Salons or Day Spas

Traditional banks are still the leading source of small business loans.

We can generally secure favorable rates for financing a salon or spa.

Bank terms are not generally as favorable as SBA-backed loans, but here is what you may expect from a bank loan:

  • Loan Amounts: $30,000 to $5 million
  • Repayment Term: Up to 10 years
  • Interest Rates: Starting at 7%
  • Time for Approval: average 4 weeks

Bridge or Hard Money Loans for Salons or Day Spas

Non-bank lenders provide bridge or hard money business loans for salon or day spa owners on an accelerated approval basis. These lenders tend to have shorter approval cycles, lower credit standards, and less paperwork than the sources mentioned above.

However, as a borrower, you should expect that there will likely be higher interest rates and fees associated with the convenience of quicker approvals and lower credit standards. If you require a quick solution to your financing needs, PHD Financial may find an alternative lender or non-bank source could be the right solution. Non-bank lenders are not subject to the same regulations as banks. PHD Financial will carefully review your loan documentation before agreeing to the terms.

What to expect from non-bank lenders:

  • Varies
  • Repayment Term: Three to 18 months
  • Interest Rates: Starting at 10%
  • Time for Approval: As fast as one business day