Business Loans For Nail, Hair, and Beauty Salons

Business Loans Salons

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.

Types of Beauty Personal Care Services Eligible For Financing

  • Beauty parlours
  • Hair salons
  • Nail salons
  • Cosmetology salons
  • Makeup artists
  • Facial salons
  • Manicure and pedicure salons
  • Spas
  • Barbershops
  • Beauty supply stores

How Your Beauty Salon Can Benefit From a Loan

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: 

Enhance Your Business

  • Move to a larger new establishment if your current space is too small
  • Remodel your salon to match your business brand and atmosphere
  • Build or modify your hairstyling, makeup, and manicure and pedicure stations
  • Design and install a new storefront sign
  • Expand your business services to include specialized services such as waxing, spray tanning, microblading, and more 

Purchase Equipment

  • The best quality furniture and equipment
    • Reclining/adjustable chairs
    • Mirrors
    • Sinks
    • Drying lamps
    • Pedicure chairs
  • Carts shelving you need to manage your supplies, tools and smaller equipment
  • Improve/ update your waiting area
    • New paint
    • Windows and flooring
    • Comfortable chairs
    • Magazines/entertainment
    • Televisions
    • Music system

Purchase Inventory

  • The right tools
    • Hairdryers
    • Combs and brushes
    • Clippers and scissors
    • Manual/electric razors
    • Rollers and other styling instruments, straighteners, curling irons, etc.
  • Purchase all the hair, beauty and makeup supplies you need 
  • Purchase additional inventory to well to your customers
  • Customized salon smocks for you, your employees and your customers

Beauty Business License and Insurance

  • Get all required licenses and insurance
    • Cosmetology license/certification
    • Damage/theft/liability insurance
    • Business license
    • Business permit

Best Business Loan Providers for Nail, Hair and Beauty Salons

AmountAPRTerm (months)
SharpShooter Funding1k-300kFee-Based: Starting at 9%12- 60 Learn more
OnDeck5k-300k8% – 29% 6-18Learn more
Lending Loop1k-500k+5.9%3-60Learn more
Thinking CapitalUp to 300k8%-22%6-12 Learn more
Merchant Growth5k-500k-6-18Learn more
BDC100K +6.05% +60Learn more
IOU Financial5K-100k15%+12-18Learn more

Factors that Can Affect Your Approval For a Business Loan  

When it comes to getting approved for the business financing you need, there are several factors that will affect your eligibility.

Personal and Business Credit Score

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.

Personal Financial Documents

Some lenders may ask you to provide your personal bank statements in order to verify your credibility. In particular, lenders will ask for personal financial information when you’re providing a personal guarantee. 

Business Financial Documents

In order to gauge your business financial health, your lender will ask for a number of financial documents such as the following:

  • Tax returnsTax returns can help lenders verify your business yearly earnings. 
  • Revenue statements – Revenue statements and business sales records may also be required so that the lender can have an idea of your revenue and cash flow.  
  • Bank statements – Lenders will use your bank statements to assess your business revenue. 

Business Plan

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 that don’t have a lot of financial data. This allows the lender to evaluate how trustworthy you are. 

Alternative Financing Options for Nail, Hair and Beauty Salons

Business Line of Credit

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.  

Merchant Cash Advance

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. 

Equipment Loan

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. 

Commercial Real Estate 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. 

Canadian Small Business Financing Program (CSBFP)

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.

Business Financing For Any Industry

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How do I Get the Best Business Financing For my Beauty Salon?

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.

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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’s 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 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. 

Get On Track With the Best Business Financing Today

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:

  • Easy to understand applications that are processed faster than a typical bank’s
  • The possibility of 48-hour financing following your application’s approval
  • Rates that compete with those of our contenders’ and help you save money
  • Payment schedules that leave you time to focus on your business and work well for your financial situation
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