How to Find the Best Financing for Your Nail Salon
It’s no secret that the beauty industry has had difficulty getting bank loans for their businesses in the current economy. Whether you are a member of a credit union or have a business bank account at a national bank, it is challenging to get many types of bank loans or any financing for that matter. It’s not you, but the beauty salon industry. However, these are new times. With the growth of new alternative lenders for businesses, the beauty salons have more financing access than ever before. Its no longer bank loan or bust.
Traditional lenders see business financing as extremely risky, which means qualifying for bank loans can be difficult. These lenders won’t give small business loans out to just anyone. They’ll likely require a borrower with an excellent credit history and credit score, a robust business plan, and significant amounts of collateral for loans for beauty salons. Some could even ask you about your relevant hospitality services experience as well.
We’re not your traditional route for beauty shop loans. AdvancePoint Capital has an extensive network of business funding providers, offering beauty salons the best small business loan options to get the funding beauty salons need.
AdvancePoint Capital has been experienced as a funding provider for the beauty industry for years. Our lenders can help you access the best alternative business lending products through our simple process. We understand the difficulties of operating a nail salon and the need for business funding to support it. Our job is to provide the best business funding products to you to run your business effectively.
Whether you’re looking to purchase equipment, need some working capital, or growth plan on expanding operations and revenue— we have the best and most reliable business funding solutions from our alternative lenders network of lending partners. Contact a loan specialist and see the difference in our consulting services.
7 Best Business Loan Options for Nail Salons
Long-Term Small Business Loans
A long term loan is a good option when looking to make major renovations or expand your business and need long term financing to spread the costs over years so the payments are affordable.
Short Term Small Business Loans
Short term loans are a great working capital solution when traditional financing is not available due to the business owners qualifications. Short term loans are typically 6 to 18 months to repay. Short term loans are considered a working capital loan.
Business Lines of Credit
Small business owners choose business line of credit because the terms are flexible. An unsecured credit line is a revolving line up to a credit limit. Business owners can draw funds at any time up to the limit and payoff early to save on interest, as you pay interest only on the outstanding balance. Interest rates are attractive for a credit line. Great product for working capital and inventory financing.
Small Business Administration-SBA Loans
SBA loans are backed by the Small Business Administration who sets the guidelines, underwriting criteria and loan guarantee for SBA approved lenders who originate and service the SBA loans. SBA loans are highly desirable by small business owners because of there low interest rates and affordable terms with reasonable origination fees. The SBA loan application process is challenging but worth the effort. SBA loans require some guidance from an experienced loan specialist.
Merchant Cash Advances
Merchant cash advances, are not loans, but future sales receivable agreements. This product is popular for businesses who can't get approved by traditional financing either for credit or other consideration. Annual revenue is considered in terms of how much you can get advanced. A great option if you have credit challenges such as a low credit scores or bad credit. .
Equipment loans allows business owners to purchase equipment using the collateral of the equipment to get favorable equipment financing terms over 3 to 5 years at affordable payments. Equipment loans do require good credit and proof of affordability.
Business Credit Cards
Credit cards are a great addition to the financing arsenal of a business. A business credit card is used to pay business expenses, make purchases, purchase inventory and pay bills. Good credit scores are required for approval.
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Benefits of Nail Salon Small Business Loan
Cash Flow/Working Capital Loans
Operating small businesses like a nail salon is a complicated venture with many moving parts to it. Various issues can impact the company’s cash flow, like seasonality, holidays, location, changes in trends, and competition. For a beauty salon, failing to meet payroll is not an option, so it’s essential to have a beauty salon loan to handle industry ups and downs and stabilize the business bank account. From working capital to seasonal needs, loans for beauty salons is a sound option.
Your beauty salon may need upgrades or repairs to the facility, spruce up the nail salon interior décor or exterior appearance to maintain or attract customers and maintain a competitive edge. In some cases, a new concept may present the need for loans for beauty salons. Business expansion is usually capital intensive and will require unique financing solutions to support the expansion and renovation opportunities that online lenders offer.
The internet marketing landscape has become a must and has added additional costs to nail salon owners. That’s why financing for advertising is so prevalent in the beauty salon business. Having a presence on the internet with various sources such as Google, Yelp, Trip Advisor, and social media like Facebook and Instagram is necessary. Maintaining a website with search engine optimization helps keep your small business on the top of google search. Additionally, more traditional sources like mailers and flyers are also advertising mainstay and expenses to operate.
Point of Sale Systems, Software, and Technology Upgrades
The point of sales systems is continuously improving and providing efficiencies to nail salon operations. You must make sure eventual investments in this area are a foregone conclusion, and financing will be needed. A beauty salon loan can be used to update systems and create more efficient processes within your operation. A nail salon owner should always be looking for new ways to keep their chairs full and improving the customer experience with easier processes and systems to help nail technicians make a significant impact.
When a nail salon acquires a new line of beauty products, it can be quite an expensive investment. When stocking up your location with products, order costs will often require financing.
How Do You Get Nail Salon Financing?
There are many options to consider and it can be challenging to get started with the application process. Online lenders or banks will want some pertinent information, regardless if they’re an online lender or from a traditional financing institution like credit unions or banks. This information mainly serves to confirm your small business’s annual revenue, financial history, credit history when they look at your credit report and legitimacy — and nail salon owners should be informed about what information they should have on hand before applying for nail salon financing.
For years, we’ve empowered small businesses around the country with the best financing opportunities and nail salon financing options that people like you can use to fund your operation.
Depending on the nail salon financing you’re looking at, each will have different requirements. However, there are some standard questions that you can expect to run across during your search for loan options.
How Long Has Your Nail Salon Been in Business?
Time in business is a standard requirement for nail salon financing — or really any type of loan you plan on obtaining as a business owner. A young nail salon is far riskier than a existing business that is established. This shouldn’t be news to any business owners reading this, but small business owners need to understand that due to the nail salon industry’s high risk, lenders must know if you’ve been around for a substantial amount of time. Time and experience in the industry shows that you can overcome obstacles and tackle challenges that many small business owners face. If so, you’re in much better shape to obtain the nail salon financing you need.
Documents Necessary to Obtain Nail Salon Financing
There are some documents that many alternative lenders will require so that they can assess the existing salon financing risk. Business owners planning on getting nail salon financing should be prepared to provide the business’s bank statements, personal and business tax returns, profit and loss statements, cash flow forecast, a solid business plan and perhaps, even more, depending on the nail salon financing.
This information proves any revenue and profit — which is frequently a big player in whether or not you’ll qualify for the various financing options available. Now, what paperwork you’ll need ultimately depends on the business loan options you are eligible for and from what outlets.
A business cash advance may require one thing, but bank loans are likely to have much harsher requirements. However, all of these documents we mentioned are fairly typical when attempting to obtain financing from your existing salon.
What Are Your Borrowing Habits?
While many nail salon funding options have varying credit score requirements, all of them will require some sort of personal and business credit score. Nail salon owners need to show lenders how well they manage loans. It’s all about trust and sound investments when it comes to beauty salon loans. So, a credit score is a great way to show that your borrowing habits are indeed fruitful for the lender.
Now, even if you have less than stellar credit, there are still beauty salon loans that you can seek. However, the interest or terms may not always be what you’re looking for or even in your budget. That being said, they still provide financing opportunities that business owners can take advantage of for working capital or any other nail salon needs. Make sure you are constantly working to improve your personal credit.