According to Bureau of Labor Statistics (BLS) data, Florida ranks second for highest employment levels in hairdressers, hairstylists, and cosmetologists.  Based on that, demand for beauty salons in the Sunshine State is high.

So, if you want to open up your beauty salon or build your existing beauty salon business, there is a viable market in Florida. That might be easier said than done, and you might need business financing to make it happen. That’s where a loan for beauty parlors in Florida specifically can come in handy. Here are five loan options to consider so you can find something that fits with your specific needs.

1. Term Loans

Setting up a beauty salon in Florida can be a significant expense. You have costs for real estate, supplies, equipment, and more. It can add up fast and be unattainable, especially if you’re a startup. But there’s one type of loan for beauty parlors in Florida that can provide a lump sum of cash and help you with your business needs: term loans.

Term loans provide the funds you need upfront and allow you to repay the money over a specific period. Borrowers can choose from a number of providers, including traditional lenders like banks and credit unions, as well as online funding providers.

Because of that, you can check out multiple loan options and review eligibility criteria and interest rates.

Pros:

• Provides a lump sum
• Offers high loan amounts
• Solid repayment terms

Cons:

• May require collateral
• Generally requires a personal guarantee
• Interest costs

Good to know: You might see the term “beauty parlour” which refers to the same thing as “beauty parlor.” The former is typically used in the United Kingdom, whereas the latter is used in the United States. Both are technically accurate and mean the same thing.

2. Equipment Loans

Salon owners need a range of equipment for their business. For example, styling chairs, supplies, sinks, brushes, blades, dryers, and more. One type of beauty salon financing in Florida can help you specifically with buying new equipment. These are called equipment loans or, sometimes referred to as equipment financing.

When you take out an equipment loan for a beauty parlor, the equipment serves as a form of collateral. In other words, it ends up securing the loan and reducing the risk for the lender. While this can be advantageous for approval, your equipment can be seized if you default on payments.

Pros:

• Wide availability
• Different repayment terms

Cons:

• Exclusively for equipment
• Depreciation of equipment
• Potential down payment needed

3. SBA Loans

The Small Business Administration (SBA) can be a great resource for beauty salon owners in Florida. The government agency even has offices in Miami and Tampa, offering certain services by appointment.

Through the SBA, you can get a loan for a salon to help finance your business. You can look at different types of small business loans the entity offers, including:

• As the name suggests, these loans are relatively small capping out at $50,000. Microloans can be used for equipment, supplies, furniture, and working capital.
• 7(a) loans. One of the signature SBA loans is 7(a) loans, which offer funding up to $5 million. SBA 7(a) loans can be used for many things including equipment, supplies, short and long-term working capital, change of ownership, and improving real estate.
• 504 loans. If you need to purchase fixed assets that can lead to business expansion or create jobs, SBA 504 loans may be able to provide funds. The maximum loan amount is $5.5 million.

If you’re looking for a loan for a beauty parlor, it may be tough to find a lender. But SBA loans don’t come with as much risk, because they’re backed by the agency. Additionally, the various loan programs can help you find the right option.  So, whether you need a lot or a little, the SBA has a type of loan to look into.

Pros:

• SBA loans backed by agency
• Multiple funding options

Cons:

• May require collateral
• Lengthy application process
• Slower funding times

4. Merchant Cash Advance (MCA)

While not exactly a loan for a beauty parlor, a Merchant Cash Advance can provide financing. The way it works is that you receive a cash advance in the form of a lump sum. Repayment is slightly different, as you pay back what you owe through a set percentage of your debit and credit card transactions.

In a beauty salon setting where your business relies on card transactions, this can be a flexible and helpful type of financing. One of the major benefits is that the loan application and funding times tend to be faster. Since the lender is purchasing a portion of your future transactions, you don’t necessarily need to have the best credit score.

Pros:

• May have easier loan approval
• Don’t need a perfect credit history
• Money in bank account fast

Cons:

• Based on volume of transactions
• Doesn’t build credit
• Expensive

5. Line of Credit

A line of credit is one of the many financing options salon owners can consider. It’s not technically a loan for a beauty parlor. But it still provides you access to credit that you can use.

When you get traditional beauty salon loans in Florida, you get a lump sum. Using a business line of credit, you get approved for a credit limit instead of a lump sum.

You can use as much or as little of the line of credit as you need. Once you repay your balance, the remaining credit limit is available to you.  Being able to borrow, repay, use more, and repeat can come in handy if you’re dealing with sporadic cash flow issues. On the other hand, some lenders may have stricter eligibility requirements making it more difficult to qualify.

Pros:

• Flexible
• Only repay what you use
• Many lenders offer lines of credit

Cons:

• Typically requires solid credit
• May have higher APR than term loans
• Potential fees

Final Thoughts on Getting a Loan for Beauty Parlor Expenses in Florida

Business owners with a beauty or hair salon or those who want to start one typically need financing to accomplish their goals.

Getting a loan for a beauty parlor can help take what you’ve built to the next level. That way you can stay competitive and get new customers, all while working toward building a thriving business. 

Before you get started, check out your local resources in Florida, including the Small Business Administration (SBA). No matter what type of financing you take on, make sure to have a business plan and know how you will use the money and how you intend to repay the loan.

FAQs about a Loan for Beauty Parlors in Florida

How Much Money Do You Need to Invest in a Salon?

The amount of money you need to invest in a salon can be significant. While you can try to bootstrap, typical costs can still clear $60,000 to $130,000.

How Do You Finance a Beauty Salon?

You can get a loan for a beauty parlor to help you finance a new salon. Start by looking into term loans, SBA loans, lines of credit, and merchant cash advances (MCA).

What is the Largest Expense in a Salon?

In general, the largest expense for many salons tends to be employee salaries. Renting   commercial space and equipment can also be a significant expense.

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