Loans For Beauty Salons

What types of loans are available for beauty salons?

Beauty salon owners or cosmetologists renting a booth can access beauty salon loans. Exploring the types of beauty salon loans with your needs in mind can help you land on the best option. Here are some beauty salon loan options to consider. 

#1. Personal loan: Personal loans are a type of installment loan that does not require collateral. They can be funded as a lump sum with few spending restrictions, offering salon owners and cosmetologists access to cash quickly. Personal loans are usually repaid in fixed installments with interest over a predetermined period. 

#2. Business loan: Traditional business loans may be available to salon owners. Business loans can be accessed through banks, credit unions, and private sources. Business loans may require collateral, and may require more information regarding your business during the application process. While they can work similar to a personal loan, the approval and funding process can take longer. 

#3. Line of credit: A line of credit can be helpful for salon owners or cosmetologists that need ongoing access to cash. In most cases, a line of credit is secured by collateral such as your home. Another example of a line of credit is a credit card. If you can repay the funds before APR applies, credit cards can be a resourceful way to spread out cash flow. However, if you need to borrow the money for longer periods, credit cards can accumulate high APR that compounds daily. 

What credit score is needed for a beauty salon loan?

Credit score can be one of the requirements lenders use to evaluate the creditworthiness of an applicant. Some lenders may have a minimum credit score requirement, while others may not. Alongside credit score other requirements such as income, debt-to-income, or credit history can also be considered. In general, offers are more likely to be returned to borrowers with fair, good, or excellent credit. According to the FICO® score scale, the fair range falls between 580-669. 

Can I use a personal loan for beauty salon equipment?

Personal loans have few spending restrictions and can be used for beauty salon equipment. Equipment can include chairs, sink, blow dryers, straighteners, dryers, towel warmers, storage carts, towels, and more. Personal loans can also be used for hair products such as color, shampoo, conditioner, and more. The products can be intended for you to use on clients or resale. When you obtain a personal loan, funds can be released as a lump sum. Therefore, if you intend to use the funds for equipment in addition to other uses, just be sure to apply for the appropriate amount upfront. 

Do I need to provide collateral for a beauty salon loan?

While some beauty salon loans may require collateral, a personal loan for a beauty salon does not require collateral. This is one of the many reasons it’s a frequent choice for salon owners and stylists in need of some cash to grow or operate their business. Personal loans are based on the creditworthiness of the borrow, so in other words the likelihood that they will repay. Requirements such as credit score, credit history, debt-to-income ratio, and more can be used to evaluate creditworthiness. 

How long does it take to get approved for beauty salon financing?

The type of beauty salon financing you use can impact the approval timeline. In most cases, a secured loan (backed by collateral) takes longer to be approved compared to an unsecured loan (not backed by collateral). In most cases, there are a few steps that take place before an approval is obtained. Let’s review so that you can better understand the timeline it may take to obtain a beauty salon loan. 

1. Application: In most cases, you’ll drive the loan process by inquiring or submitting an application for a loan offer. The offer returned is generally a pre-qualified offer. Once you’ve received a pre-qualified offer you can choose to accept or reject. Some lenders can return pre-qualified offers in as little as seconds or minutes. 
2. Offer acceptance: If you choose to accept the pre-qualified offer, the lender can proceed with verifying your information. To do so they may request supporting documentation or authorization to perform a hard credit pull. The time it takes to complete this process can vary depending on how much the lender needs to verify. Submitting accurate information during the application process and providing supporting documentation (if requested) promptly can help the process move along smoother. 
3. Approval: Once your information has been verified, you can receive a loan approval. Approved loans can be funded. Once you’ve reached the approval stage, you can receive funds in as little as 1-2 business days, although funding times may vary.