Article Summary:

• Buying beauty salon equipment can be a major hurdle to opening a salon.
• Salon equipment financing is available through various loans and lines of credit.
• Texas can be a great choice for opening a beauty salon.

How to Get Beauty Salon Equipment Financing in Texas

Texas has the most hair stylist and cosmetology jobs in the USA, according to Bureau of Labor Statistics (BLS) data. So if you want to stop renting a salon station and break out on your own, Texas might be a good place to do that. The problem is that opening a beauty salon could have startup costs between $60,000 to $130,000. You might not have that kind of cash lying around. But before you put your dream on pause, beauty salon equipment financing could be the answer.

What is Beauty Salon Equipment Financing?

Beauty salon equipment financing refers to a type of funding to purchase new salon equipment. Salon equipment financing can come in many different forms, such as a small business loan or line of credit.

However, there are equipment loans in Texas that specifically help salon owners finance equipment purchases. Equipment loans may be easier to qualify for in some cases for a couple of reasons. First, the loan purpose is clear, and the funds must go to equipment. Secondly, the equipment you purchase with the loan acts as collateral.

When you have a form of collateral, you “secure” the loan. Securing a loan gives you a better shot at loan approval, as the lender can take the collateral or equipment if you fail to repay the loan.

Types of Equipment You Might Need

If you're opening a beauty salon in the Lone Star State, you need the right equipment to get started. Some types of salon equipment you might need include:

• Adjustable styling chair for hair cutting
• Shampoo bowls
• Dryer chairs
• Reception desks
• All purpose chairs
• Spa equipment for a manicure or pedicure
• Reclining chairs for skin care treatments or massages
• Hair steamers
• Backwash unit
• Wall mount styling stations
• Hair color processors

These are just some of the basics for opening your salon. You might have even more things on your wishlist like fancy salon furniture to enhance the client experience. There are also special supplies you need like high quality shampoo, hair dryers, hair color, and shears.

While you can try to bootstrap your hair salon or barbershop, the fact is you’ll need a base of equipment and supplies to get started. Do some research on your must-haves and set a realistic budget. That can help you decide your loan amount when taking on salon equipment financing.

Different Types of Beauty Salon Equipment Financing

Before looking into beauty salon equipment financing in Texas, know your desired loan amount and the loan purpose. This can help clarify what you’re looking for which helps you and the prospective lender.

Every salon owner has different business needs. As such, what type of financing works for one might not work for another. Here we break down five different loan options to consider if you need salon equipment financing.

Equipment Loans

Salon owners can take advantage of equipment loans. The express purpose of this type of loan is to help you buy beauty salon equipment in Texas. Since the equipment is a form of collateral, it’s not as risky for the lender. Generally, your lender will allow you to borrow a high percentage of the equipment’s value, such as 80%. You’re responsible for paying the rest as a down payment, but the amount varies based on the lender.

Repayment terms depend on your lender. However, the terms typically range from one to six years, but can vary on the lender. Consider the length of your repayment term, which impacts the size of your monthly payments.

Term Loans

If you’re looking for a set amount and want a predictable repayment schedule, term loans are a good option. Term loans are available through traditional banks and online lenders and provide you with a lump sum. You might also find term loans through local credit unions in Texas as well. Check both local and national options and compare rates and terms before you apply.

Repayment terms vary significantly. Some can be as little as several months to a year, while others are up to 25 years.

While term loans can be a great way to buy new beauty salon equipment in Texas, be aware that some lenders require collateral in exchange for the loan. Collateral is an asset that backs the loan, lowering the level of risk for the lender. If you’re able to get an unsecured term loan, the interest rates on the loan will likely be higher.

SBA Loans

The Small Business Administration (SBA) has a wealth of information for small business owners. In Texas, the federal agency also has offices in Dallas/Fort Worth and Houston that provide support. The agency also offers SBA loans including:

• Microloans
• 7(a) loans
• 504 loans

Though there are some nuances with these SBA loans around loan limits and purposes, all of them can help pay for equipment. The primary benefit of SBA loans is that they’re backed by the agency. Because of the lower risk for the lender, it means more possibilities for you. However, getting a loan through the SBA can be more time-intensive and come with strict eligibility requirements.

Line of Credit

Another option to help you pay for beauty salon equipment in Texas is a line of credit. Banks or other financial institutions can approve you for a line of credit up to a certain amount. From there, you can use your available credit to make purchases. You pay back the amount you’ve used.

As you continue to pay back what you owe, you’re free to use the remaining available credit. Similar to a credit card, a line of credit offers borrowers flexibility instead of a one-time lump sum. The downside is that typically you must pay fees to access this type of beauty salon equipment financing.

Business Credit Cards

If you need short-term salon equipment financing or only need a little money, business credit cards can fill that need. As a type of revolving credit, you can charge beauty salon expenses on your card and pay it by the due date. It can buy you some time to manage your cash flow. This strategy is best for business owners who need a small loan amount and can afford to pay off the balance in full.

Carrying a balance can be costly. While business credit cards offer fast funding and immediate support in the short term, they come with higher interest rates than traditional loans. So if you don’t pay back the full amount by the due date, interest accumulates, and you could be stuck paying down debt longer than you want.

Additionally, be aware that lenders will review your personal credit score and history as part of determining your eligibility. However, you can begin to build business credit with a business credit card as well. To do that, register with the business credit agencies such as Dun & Bradstreet.

Final Thoughts

Thinking of opening a beauty salon in Texas can be exciting and nerve-wracking. It’s a major investment of time and resources. But if you want more ownership and autonomy, you can secure beauty salon equipment financing to get the funding you need. Based on the different options, you can choose something that will help you execute your vision and bring your business to life.

FAQs about Beauty Salon Equipment Financing

How Do You Finance a Salon?

You can finance a salon through different financing options. These include term loans, SBA loans, lines of credit, business credit cards, and equipment loans.

What Are the Requirements for Salon Equipment Financing?

The requirements to secure salon equipment financing depend on the lender. However, most want a minimum credit score, several years of business history, and income to show that you can repay the loan.

What Are Alternatives to Salon Equipment Financing?

If you’re having a tough time getting approved for salon equipment financing or are not ready to take out a loan, you have some alternatives to consider. You can crowdfund using third-party platforms like GoFundMe and sell gift cards or coupons for people to redeem in the future.

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