Beauty Salon Loans
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How a Beauty Salon Loan Can Help Your Business?
The beauty industry has become increasingly competitive in the past years, you can find beauty salons everywhere. The competition has driven many beauty salons to begin offering more services or sell more products.
Because of the increased competition and the need to stay ahead, many salons need to hire additional employees, purchase new equipment, or add more inventory to fit the growing demands of business.
Beauty salons are upscale by nature. As a business owner, you need to maintain a pristine environment where customers can unwind and relax. Equipment like massage tables, spa chairs, tanning booths, hot tubs, and even showers don’t come cheap.
If you want to carry the expensive brands of skin care lotions, moisturizers, and creams, you’ll have to pay the brand name prices. You also have to consider the maintenance of equipment and other materials needed to keep your facility looking clean and modern.
SMB Compass understands the challenges of running a beauty salon. That’s why we are committed to making funds easily accessibly via beauty salon business loans.
Different Ways to Use a beauty salon business loan
SMB Compass is committed to helping business owners achieve their dream of owning a successful beauty salon business. Our loan programs can provide the funding businesses need to expand, hire new employees, or cover daily expenses, as well as:
Purchase or Repair Equipment
Beauty salon equipment comes at a price – a price your business may not be able to afford out-of-pocket. If you need to buy equipment, but you don’t have access to cash, there are financing options you might want to try.
You don’t have to drain your bank account to purchase or repair equipment. Whether it needs replacing, or you need to purchase new equipment for your booming business, a beauty salon loan will help cover the cost of equipment purchases or repairs.
Add Inventory or Supplies
Beauty salons need supplies to run daily operations. Shampoo, nail polish, hair brushes, conditioners, hair dyes, hair treatments, and other types of products must be readily available at all times.
If you don’t have enough inventory, your business will definitely miss out on additional revenue and stall. There will come a time when you need to replenish your stock, so make sure you have cash available when you need it.
Improve Marketing and Advertising
Without your customers, you won’t have a business. While you may already have loyal clients, a growing business always needs a steady influx of new customers.
When done right, an advertising and marketing campaign will boost your business’ visibility and expand your reach. A beauty salon business loan can be used to increase marketing and advertising efforts to get more people into the door or onto your website.
Handle Cashflow Problems
As with other businesses, it’s not uncommon for beauty salons to experience slow seasons or off-seasons, which takes a toll on working capital. Even when cash flow is tight, you still have a staff to maintain and bills to pay.
Fortunately, cash flow doesn’t have to be an issue. A beauty salon loan provides you with the money you need to maintain business operations during a seasonal slump or after an unexpected loss.
Best Types of Loan Programs for Salon Business Loans
SMB Compass offers different types of financing options for your beauty salon needs. We also have financial advisors on hand, ready to help you determine which option is right for you.
Here are the most common types of financing for beauty salons:
SBA 7(a) Loans
The Small Business Administration (SBA) created multiple loan programs for small businesses looking to secure long-term financing. These loans provide incentive for lenders to fund small businesses by guaranteeing a percentage of the amount borrowed to the lender.
Among other types of SBA loans, the 7(a) loan is the most popular among qualified business owners. It has high loan limits, low-interest rates, and flexible payment terms. You can also use the 7(a) loan for almost any business expense, such as expanding your salon business, renovating your salon, or it can be used to fund other business expenses.
Salon Business Line of Credit
Just like with a credit card, a business line of credit is a revolving credit line, allowing you to access cash whenever you need it. When you qualify for a business line of credit, your lender will determine a credit limit and interest rate. Since the line is revolving, once you pay toward your amount owed, your amount available on the line goes back up.
Merchant Cash Advance
If your business needs quick access to cash, you might want to check out a merchant cash advance. While you might pay higher interest rates, you will have the option to repay your loan quicker to limit fees. Additionally, you don’t need to have a high credit score to qualify.
With equipment financing, lenders provide you with the funds you need to purchase equipment for your beauty salon. Think about all of the stylist chairs, hair dryers, or even point-of-sale systems necessary to run your salon. Equipment financing can cover those costs to remove the burden of large purchases out-right.
There are typically two equipment financing options: equipment leasing and equipment loans. Lenders determine the rates, terms, and schedule for payments.