Are you looking to start, remodel or expand your nail, hair, or beauty business? Are you concerned about the costs associated with running a business in Canada? The right business financing can help you reach your goals and create a business that is not only successful but a place that people want to visit.
Running a nail, hair or beauty salon means you’ll have a number of costs to deal with such as payroll, inventory, rent, etc. Moreover, unexpected costs like equipment failure can lead to an immediate need for a cash influx. Thankfully, the versatility of a business loan can help you cover any cost, for example:
| Amount | APR | Term (months) | ||
 | 1k-300k | Fee-Based: Starting at 9% | 12- 60 | Learn more |
 | 5k-300k | 8% – 29% | 6-18 | Learn more |
 | 1k-500k | +5.9% | 3-60 | Learn more |
 | Up to 300k | 8%-22% | 6-12 | Learn more |
 | 5k-500k | - | 6-18 | Learn more |
 | 100K + | 6.05% + | 60 | Learn more |
 | 5K-100k | 15%+ | 12-18 | Learn more |
When it comes to getting approved for the business financing you need, there are several factors that will affect your eligibility.
In general, lenders will evaluate both your personal and business credit score to determine if you are creditworthy. For new owners or young businesses that have not yet developed a business credit score, lenders will typically evaluate your personal credit.
Some lenders may ask you to provide your personal banks statements in order to verify your credibility. In particular, lenders will ask for personal financial information when you’re providing a personal guarantee.
In order to gauge your businesses financial health, your lender will ask for a number of financial documents such as the following:
Lenders may require a business plan detailing your need for a loan and how you plan to use it. This is particularly true for new and young businesses who don’t have a lot of financial data. This allows the lender to evaluate how trustworthy you are.
Having access to a business line of credit can provide your business with the financial cushion it needs to combat unexpected financial emergencies. Due to its flexibility and easy access, a business line of credit can help your salon replenish your inventory with hair and beauty products, purchase small equipment like blow dryers and scissors, and any other immediate or day to day expenses.
A merchant cash advance is a loan that is given in exchange for a percentage of your future card sales. While this form of credit can be more expensive, it’s an easy and fast way to qualify for a lump sum of cash. Moreover, payments increase or decrease according to your credit card and debit sales, so you don’t have to worry about making any fixed payments during your slower days/months.
An equipment loan works just like a regular business loan except that the equipment you finance acts as collateral. Due to this security, equipment loans are easier to qualify for, even for large amounts. As such, financing expensive items like spray tan machines, nail dryers, pedicure chairs, and salon chairs are best done through an equipment loan.
In order to run your salon, you’ll need your own business space. While you could rent out an area, owning your own commercial property is an asset that can be utilized to your advantage in the future. Moreover, a commercial real estate loan is a long-term loan that can be amortized over 25 to 30 years.
The CSBFP is a government-backed loan that is issued through the bank. It provides loans for small businesses up to $1 million and $350,000 for equipment and leasehold improvements. If you have good credit and would like to purchase an asset that will help grow your business, the CSBFP can be a perfect solution for your business.
Learn more about the government financing programs available in Canada.
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When looking for financing, it’s important to consider what you’re trying to cover. Depending on the expense, one financing option may be better than the other. For example, if your salon is running behind on paying your suppliers and you need to make a payment quickly, using a business line of credit would be wiser than using a business loan. Similarly, if you’re looking to purchase equipment for your salon, an equipment loan would be wiser than a business loan as the equipment acts as collateral which leads to better loan terms.
In addition to the type of financing, it’s important to compare rates and get quotes. You can do so by utilizing loan comparison websites. With a single application, you can not only get multiple quotes from different lenders, but you can compare rates, terms, and reviews on different lenders in your area.
Frequently Asked Questions
My lender requires a business plan, what should it include?
A business plan is a 2-3 page report that details your plan and goals for your business. In general, your business plan includes why you need the loan, how you plan to use it and how it will affect your revenue. It is important to include your financial projections for the next 3-5 years as it is how your lender will determine if your business will be capable of repaying the loan. The more you’re able to communicate your business viability, the more your lender will trust you. Can I get a loan for my beauty salon if I have bad credit?
Yes, you can still get the financing you need for your beauty business even if you have bad credit. Many alternative lenders base their approval on other financial aspects such as your business monthly sales, assets, and debt level. What can I do to increase my chances of approving a beauty business loan?
One of the main factors lenders evaluate when approving you for a loan is your credit score. As such, improving your credit score by making full on-time payments and reducing your debt level can increase your odds of approval. You can also increase your chances of approval by reducing your lender’s risk by securing the loan with an asset or by adding a co-signer to the agreement.
Yes, owning any business can definitely put a lot of financial strain on you, but it doesn’t have to be that way. At Loans Canada, we’re offering to connect you with simple, satisfying business financing. And that’s not all. Business loans through our company also come with:
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