Did you know that the spa industry grows about 2.7% every year? In fact, the beauty market is projected to reach $190.81 billion by 2024 globally. This entices entrepreneurs to start their own beauty salons or spa businesses. However, heavy competition makes it harder for spa businesses to maintain healthy cash flow. When this occurs, numerous business owners turn to Louisville business loans to keep their businesses afloat.
Prior to taking out a loan, you need to make sure you can pay it back. Evaluate your business and think about how much you can afford to pay when it comes to monthly, weekly, or daily payments. Once you’ve figured everything out, here are three top places where you can apply for funding.
1. Local Banks
When entrepreneurs think of business loans, a bank loan is the first thing that comes to mind and for good reason. Bank loans are one of the cheapest sources of financing in the market, but here’s the catch – applying for bank loans can be tedious. It usually takes weeks or months before they reach out to you, and the approval rates are relatively low. However, if you think your finances are in great shape and you can afford to wait for months, you can try applying for small business loans from a bank you trust.
2. The Small Business Administration
The Small Business Administration (SBA) created SBA loans for business owners looking to secure financing. But contrary to popular belief, the SBA doesn’t actually lend out funds to small businesses; rather their role is to guarantee a portion – usually up to 85% of a loan. This is an enticing incentive for traditional lenders to approve you, seeing there’s little risk on their part.
SBA loan applications also tend to be extensive, but the process is more streamlined compared to bank loans. To qualify for an SBA loan, your finances need to be in tip-top shape. If you’re denied a bank loan, SBA loans are a great alternative. Processing SBA applications also take time, so if you’re in a hurry, it’s best to look for financing elsewhere.
3. Online Lenders
Many business owners have turned to online lenders or alternative lenders in order to secure funding. Online lenders offer a variety of loan products at different prices. If you don’t qualify for a bank loan, online lenders are a great alternative.
Online lenders usually price their loan program in a variety of ways, complete with various interest and factor rates, to APR. When shopping for loans, make sure to ask for the APR before working with them. It’s best to compare the APR on different loans to ensure you’re getting the best deal possible. If potential lenders aren’t willing to convert their offers to APR, you can calculate it yourself using a business loan calculator.
4. Personal Loans
Did you know that you could use personal loans to finance your business? However, personal loans have smaller loan limits and you become personally liable for repayment. Personal loans are a better option for business owners who have poor or no business credit.
5. Business Credit Cards
Business credit cards are a valuable tool for business owners that need quick access to working capital. Some banks offer a 0% intro APR period. It’s like having an interest-free loan, but make sure to pay your balance in full before the promotional period ends.
Depending on the bank you’re working with, business credit cards offer different perks, like customizable cashback options, points on advertising spend, and the bonus of separating your business and personal finances.
In the initial stage of your spa business, you can use business credit cards for smaller expenses, such as marketing, inventory, etc. However, use your credit limit wisely and only swipe what you can repay.
Louisville Business Loans – Small Business Loans for You
Choosing the best type of salon business financing can be overwhelming, considering the number of options available to you. It’s your responsibility to find the best financing – whether it’s a loan or a credit card, that has the rates and terms that make sense for your company and your bottom line. Fortunately, you don’t have to do everything alone.
Whether you need funds to put up your spa business or you need an infusion of capital to take your business to the next level, you can choose from numerous financing options. If it’s your first time applying for Louisville business loans, it’s best to talk to financial advisors. They can help you find the most suitable route to obtain financing and they can walk you through the entire process.