Business Loans for Salons and Spas: Financing Growth and Equipment

Salons and spas combine personal service with retail and real estate elements. You need quality space, specialized equipment, and skilled staff — all of which require capital. Understanding financing options helps you invest in your business appropriately.

Whether you are opening a new location, renovating your existing space, or adding services, the right financing structure supports sustainable growth.

Salon and Spa Financing Characteristics

Beauty and wellness businesses have distinct financial profiles:

• Location-dependent — Visibility, accessibility, and ambiance matter
• Build-out intensive — Specialized spaces require significant investment
• Equipment needs — Chairs, stations, treatment equipment, technology
• Staffing models — Employee vs. booth rental affects financials differently
• Retail component — Product sales supplement service revenue
• Recurring relationships — Regular clients provide stable revenue

Financing Products for Salons and Spas

Different products address different salon needs:

Build-Out and Renovation Financing

Salon and spa spaces require significant build-out investment:

• Plumbing requirements — Multiple stations need water supply and drainage
• Electrical capacity — Equipment power needs, HVAC for proper ventilation
• Aesthetic elements — Finishes, lighting, and ambiance that reflect your brand
• Treatment rooms — For spas, dedicated treatment spaces with specific requirements
• Reception and retail — Front-of-house space for client experience and product sales

Equipment Financing for Salons

Common equipment financing needs include:

• Styling chairs and stations — $500-$2,000+ per station
• Shampoo units — $1,000-$3,000 per unit
• Treatment tables and equipment — Varies widely by service type
• POS and booking systems — Technology infrastructure
• Spa equipment — Massage tables, facial equipment, laser/light devices

Equipment financing works well for salons because the equipment has resale value and lenders understand the industry.

Real-World Scenario: Salon Expansion

The situation: A hair salon in Frisco has been operating for 5 years, generating $420,000 annually with 4 stylists (employment model). The current location is at capacity, and the owner wants to move to a larger space to add 3 stations.

Capital needs: $120,000 total — $75,000 for build-out, $25,000 for new equipment and stations, $20,000 for moving costs and working capital.

The financing approach: SBA 7(a) loan covering total project cost with 10% owner injection.

Terms: $108,000 loan (90% financing), 10-year term at Prime + 2.75%, monthly payment approximately $1,450.

Key factors: Strong existing business performance, profitable operations, owner equity injection, and detailed build-out budget from contractor.

The outcome: Relocated and expanded within 4 months. Filled new stations within 6 months. Annual revenue grew to $580,000 within 18 months.

Staffing Model Impact on Financing

How you structure your salon affects how lenders evaluate you:

Employment Model

Stylists are employees paid salary or commission:

• Higher gross revenue — You collect all service charges
• Higher expenses — Payroll, benefits, employer taxes
• More control — You set schedules, pricing, standards
• Cash flow management — Payroll obligations regardless of revenue

Booth Rental Model

Stylists rent stations as independent contractors:

• Lower gross revenue — You collect rent, not service revenue
• Lower expenses — No payroll obligations for stylists
• Less control — Stylists manage their own businesses
• Predictable cash flow — Fixed rental income

Neither model is inherently better for financing — but you need to present your financials appropriately for your model. Lenders may want to see commission structures or rental agreements to understand your revenue and expense patterns.

What Salon Lenders Evaluate

Beyond standard metrics, lenders focus on:

• Revenue per station — Productivity metrics for your model
• Client retention — Regular clients indicate business stability
• Stylist retention — High turnover creates instability
• Location quality — Lease terms, visibility, parking
• Retail performance — Product sales as percentage of revenue
• Service mix — Higher-margin services vs. basic cuts

Working Capital for Salons

Ongoing working capital needs include:

• Product inventory — Retail and backbar products
• Payroll timing — For employment model salons
• Seasonal patterns — Wedding season, holiday rush, post-holiday slow
• Marketing and promotion — Client acquisition and retention

A line of credit provides flexibility for these variable needs without taking on fixed debt obligations.

Salon and spa financing is accessible for businesses demonstrating stable operations, reasonable build-out plans, and sustainable growth objectives. SBA loans work well for larger projects, while equipment financing and lines of credit address ongoing needs.