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📅 Last Updated: April 3, 2023
✏️ Written By Caitlin Wood, BA
Business Loans Spa

Do you own a spa or wellness center in Canada? Are you in need of funding to cover the cost of an unexpected expense or to invest in the expansion of your business? We’ve got you covered. At Loans Canada we can leverage our years of experience to match you with a business loan that meets all your needs.

The Right Business For You

Just as spa-goers can benefit from therapeutic treatments, spa owners like you can certainly benefit from a business loan. If you’re looking to make your facility the greatest luxury pampering spot around, you’ll need financing that works for you. Finding a lender who understands you and your business’s needs can be a lot of work, so let us do the work for you.

What Are The Requirements to Qualify For a Business Loan? 

For a spa to qualify to access a business loan, there are certain criteria that it must meet. While the specific metrics vary based on the lender, there are some industry standards that remain true across the board. These include: 

Personal and Business Credit Score

When assessing a potential borrower, the first metric used to determine viability is the credit score of both the owner and the business itself. A credit profile establishes the merit of the borrower by providing a historical representation of their financial habits. When either the spa or the owner takes out a loan, makes a payment on a lease, or pays a credit card, it is reported to the credit bureaus. 

In Canada, there are two separate credit bureaus: TransUnion and Equifax. These bodies compile the financial information, including payment details and information on any defaults. Using this information, both the business and the owner are assigned a numerical score. This number is used, in conjunction with the details on the credit report, to determine how reliable a borrower the spa will be deemed. 


While nothing can predict future business, the most reliable way of predicting this number is to look at historical revenue. The lender will take a look at the money brought into the business in terms of gross figures (before operational costs). Usually, this is measured by compiling the amount the business brought in over the past quarter. Since many spas are subject to seasonal differences in business (an uptick around Valentine’s Day and a slowdown during summer vacation), quarterly assessments are a good predictive mechanism to determine what you are likely to make in the upcoming period; the time where you would be expected to repay the loan amount. 

Check out these three common revenue statements all business owners should know. 

Cash Flow

The next criteria for a potential lender is looking at the actual cash flow of the spa. While this sounds similar to revenue, cash flow is a unique metric. Though revenue is your gross intake of funds, cash flow is basically a representation of what you have leftover after your costs. Once the business pays for overhead, including employee salaries, the remaining funds determine the liquid cash your company has. These are the funds you would have remaining to pay the installments of your loan. As such, it is an important metric for the lender to assess. 


Though any assets would not necessarily be used as collateral, they do assist in determining your merit as a borrower. Assets can range from real property to equipment such as laser treatment machinery, tanning beds, and other spa tools owned by your company. The value of those assets is included in the overall valuation of the company, therefore it is better to list all possible assets on an application. Often, if you are unable to qualify as is, assets can be converted into collateral, provided there are no existing liens on the items. 


A lender will also need to know any debt assigned to your business, though they may also want to learn about personal debt if you are a sole proprietor. Everything from the total debt amount to the monthly installments to the duration of the debt is used to determine whether you qualify for a business loan. Debt is not necessarily bad for a business to have, so long as, based on the revenue and cash flow, it is a manageable amount of debt. 

Time in Business

Naturally, the longer your spa has been in business, the safer it is for a lender to offer a loan. Since many businesses fail within the first year, having a proven track record of success as a spa shows lenders that you are able to survive. Newer businesses have a shorter credit profile and no real way of displaying their ability to withstand difficulties, whether they be internal or relating to the larger economic picture. The more time your business has under its belt, the more likely you are to qualify for a business loan. 

Business Plan

Finally, the lender will want to understand how you plan to use the loan funds. Effectively a pitch to access the money, a business plan involves more than just detailing how you plan to use the loan. It is a matter of thoroughly detailing both the big picture and daily operations of your company. The borrower must highlight how the influx of cash will be used to grow the business. A return on investment is good for the spa since it helps bring in money. It is good for the lender, too, since it shows that you can repay the loan.  

Best Business Loan Providers

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

Treat Yourself and Your Customers

Favourable rates and payment plans aren’t the only benefits a business loan can give you. There are plenty of other areas of your wellness spa where a loan can be put to good use. For instance, you could use a business loan to:

  • Attract new clientele through advertising (television/radio segments, billboards, health magazine articles, brochures/signs in wellness stores, etc.)
  • Construct and/or remodel your outdoor area (terrace, hot and cold pools, jacuzzis, waterfalls, gardens, stone walkways, fire pit, etc.)
  • Construct and/or remodel your indoor area (temperature regulated pool, steam and dry saunas, lounge area, juice bar, etc.)
  • Furnish your outdoor and indoor areas (cushioned lounge chairs, reclining chairs, solar umbrellas, tables, hammocks, etc.)
  • Finance acupuncture, microdermabrasion, or massage/physical therapy training for you and/or your employees
  • Pay your current employees and fire new ones
  • Build, remodel, supply and furnish a hotel area for guests to stay overnight
  • Buy spa garments (robes, towels, sandals, bathing suits, etc.)
  • Buy/build the latest spa equipment (massage tables, mud bathtubs, Swiss/Vichy showers, manicure/pedicure stations, Scotch hoses, steam cabinets, etc.)
  • Stock spa supplies
  • Stock your retail store with inventory
  • Build a state of the art sound system in your lounge area for relaxing music
  • Build a kitchen, bar and restaurant area, make menus and serve healthy food/drink choices

Business Financing For Any Industry

Own a business in another industry? Click here

Other Ways to Finance Your Spa

If you are unable to access a business loan for your spa, or if you are qualified and determined that the interest rates are too high, there are other routes you can take.

Merchant Cash Advance

While this type of loan is not traditionally structured, it is often a good approach for businesses like spas. With this type of financing, you are provided with a lump-sum amount upfront. Then you repay the loan via a percentage of your daily credit card and debit sales. A merchant cash advance is a great option for businesses whose clients pay with cards and not cash. Often, it is the most efficient way to access funding, particularly for those with poor credit. Keep in mind that merchant cash advances, while good in a pinch, are typically expensive methods of borrowing. 

Equipment Loan

Most spas require a substantial amount of physical equipment in order to offer their services. These range from hair removal equipment to tables and everything in between. For this type of financing, the equipment bought with the proceeds of the loan is used as collateral. Though this tends to be an affordable way to access cash, the loan won’t pay for the equipment in full. Typically, the lender will pay for approximately 80 percent of the total cost, with your spa business responsible for the remainder of the cost. 

Learn more about how whether you should lease or finance your equipment

Business Line of Credit

Enabling you to access funds as needed, a line of credit lets you borrow funds up to a set amount. Similar to a credit card, once you repay the amount you used from the credit line, you once again have access to the full line of credit amount. One of the key draws of this type of financing is that you are only responsible for the interest on the amount you spend from the line of credit. Typically, interest rates are lower for lines of credit than credit cards, though they may be more challenging to qualify for if your spa is new. 

Business Credit Card

Just like a personal credit card, a business credit card is a type of revolving credit. You get a credit limit and pay interest on the amount you use. It enables you to repay the amount either in full or in installments, though the interest compounds if the amount is not paid in full each month. Credit cards generally have higher interest rates, so they are often not a preferred approach to business financing for larger purchases. That said, most companies have a business credit card for incidentals. 

Canada Small Business Financing Program (CSBFP)

An option worth investigating is the grants available through the Canadian government. The CSBFP is a loan program available through major domestic financial institutions. The amount available depends on the way you plan to use the funds. For the purposes of equipment purchases and improvements to real property, your spa can access up to $350,000. If you plan to use the funds in another way, with a focus on growing your company, you can get loans up to $1,000,000. 

Check out more government financing options for your business.

Documents Needed to Apply For a Business Loan

In order to get a business loan for your spa, there are several key documents you will require. These include:

Business plan: Detail how you plan to approach business once the funds are received. Keep the focus on the return on investment, since this is a key metric for the lender. Be specific yet concise when providing your business plan. 

Bank details: In order to receive the funds, you will need to supply the lender with your banking information so that they are able to transfer the funds to the company upon approval. In most cases, this same information is used to automatically withdraw the regular loan payments. 

Business licence and registration: Your business incense and registration show that you have an official business that is legally allowed to operate in your jurisdiction. It highlights that you are an above-board, tax-paying company that has completed registration with all relevant governing bodies. As a spa, you may also be asked for proof of inspection by the Ministry of Health in your province. 

Financial documents: 

  • Tax returns: Provide both personal and business tax returns for at least three years (if possible). Not only does it give a clear-cut measurement of your annual income, but it also shows that you are currently on your taxes and that there are no liens against the business from the federal government. 
  • Bank statements: While these are only technically necessary for the business, it helps to have your personal bank statements as well — especially if you are the sole owner of the business. Provide them for as far back as possible for the business. It helps to offer personal bank records for at least the previous quarter. 
  • Revenue statements: This measures the amount of money your business took in. Providing this to your potential lender shows that you have paying clients and works to reinforce your business plan. 

Business Loan FAQs

Do business loan lenders check personal credit?

Yes, as the proprietor of the company, your personal credit is taken into account when determining if you qualify for a business loan. Your personal credit speaks to how responsibly you manage financial obligations. Proper debt management and regular bill payments show that you handle loans prudently. Frequent defaults and a high debt-to-income ratio indicate that you are a higher-risk borrower.  

Will bad credit prevent me from getting approved for a business loan?

While you can access a business loan for your spa with poor credit, it is unlikely that you will be able to get a loan through a major financial institution. Instead, companies in this situation reach out to alternative lenders. These companies have flexible lending requirements, though tend to have higher rates of interest. Be sure to consult a reputable loan comparison platform to make sure you are getting the best rates possible. 

 How do I get a low rate on my business loan? 

In order to get a business loan for your spa with a low-interest rate, there are a few key steps to take. The first is to improve your credit. Ensure that you make payments on time and in full. Reduce your overall debt, focusing on higher-interest loans first. Another step is to increase your cash flow, whether that is through low-cost advertising or reducing your expenses.  If you are looking for a more immediate solution, the best option is to either add collateral or a cosigner. Collateral can include real property (like your spa location if you own it) or your spa equipment. When considering a cosigner for the loan, it is always preferable if they have good credit. 

The Business Loan You Need is Just a Click Away

At Loans Canada, we work with businesses just like yours, every day. So, we’re well aware of how busy you can be on a daily basis. Don’t stress, because your business loan is only a click away! 

Caitlin Wood Priyanka Correia Lisa Rennie Bryan Daly Cris Ravazzano Margaret Johnson Kale Havervold Liz Enriquez Sean Cooper Veronica Ott Corrina Murdoch Chrissy Kapralos

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