As a salon or spa owner, your customers come to you for pampering and comfort. But who’s looking out for your well-being when you need a financial boost, an infusion of working capital for your beauty salon or spa business? At LVRG, we offer sophisticated financing solutions to help you earn your share of the $45 billion salon and spa industry market. Salons and spas often have a lot of growth potential, but not enough free capital to realize that promise. A small business loan can give you the freedom to expand at your own pace, and LVRG wants to help make that happen.
Spa and salon owners take care of a wide range of health and beauty needs, helping people mold themselves into who they want to be. But growing the business often means adding new services, and that requires capital, for equipment, training, and even new hires.
We have years of experience in financing beauty salons, barber shops, nail salons and spas; so we understand the seasonal nature of your business. With a small business loan, term loan, business expansion loan, cash flow loan, or business cash advance, you can prepare for peaks in business or improve cash flow during the slower times between the wedding season and the holidays.
It’s your hair salon or spa, and you want to run it your way. With our hassle-free financing solutions, you can access between $15,000 to $2,000,000 in as little as 24 hours. Plus, you can use your working capital for any business expense, including:
Upgrading salon equipment or purchasing beauty supplies
Evening out cash flow between seasonal peaks in business
Remodeling to give your salon or spa a fresh, new look
Marketing gift cards for Valentine’s Day, Mother’s Day & the holidays
At LVRG, we believe we are different from other lending firms. We never set out to be the biggest, but we constantly strive to be the best. Our deep sense of integrity, professionalism, and commitment to the spirit of entrepreneurialism propel our determination to provide assistance to salon and spa owners in a challenging economic climate.
So.... Which loan product is right for your salon?
There are several salon loan and funding programs that have been used to finance all types of salons. Traditionally, salons have received fairly competitive loan rates and terms, with interest rates generally ranging between 5.75% and 8.75% across most types of financing and structured as fixed, variable or fixed-to-float. There are also quick close products, like a merchant cash advance, cash flow loan or revenue based loan, that have higher effective interest rates, but require minimal paperwork and no collateral. The term and amortization of a salon from an institutional lender is often structured anywhere between five and twenty-five years, depending on the assets being financed with the loan. Financing for hard assets, such as real estate generally receive terms between fifteen and twenty-five years, while a loan for working capital or inventory could have a term of one to ten years. There are several loan products that borrowers should consider for salon financing, including:
Fully amortizing up to 5 year terms. Ideal for salon owners with large single purchases or need to refinance debt. Fund marketing efforts, open new locations, or purchase equipment; all while building your business credit. What’s more, term loans can be funded in as little as 3 days and require less stringent underwriting guidelines than the SBA.
SBA Loans ($50,000 - $350,000)
Small Business Administration Loans are generally the least expensive financing option for small business owners. The SBA 7(a) loan is the Small Business Administration’s most popular product and offers a flexible sum of cash that can be used for anything from managing daily operations to purchasing new products and refinancing high-interest loans.
Least Expensive Financing - It would be tough to beat the low rates of SBA loans. SBA is an excellent option for salon owners looking to keep financing costs down.
Great Financing for Growth - If your primary goal is to grow your salon, getting an SBA loan is an excellent way to reach that objective. You get the funds you need on manageable terms.
Funds in as fast as 7 days after the application is completed!
Asset Based Lines of Credit
salon owners may use asset based lines of credit for an array of business uses. Asset based financing for salons can be either revolving or term loans secured by assets such as accounts receivable, or real estate.
Unsecured Business Line of Credit
Unsecured credit refers to loans or lines of credit where there is no collateral to back the loan. Although this type of lending is possible for a salon, it is considered risky for lenders. The salon owner's personal financial strength as well as the business cash flow needs to be strong in order to qualify for an unsecured line or loan.
Revenue Based Loans
A revenue based loan could be your salon's lifeblood and provide it with several financial benefits. When your salon is growing, chances are you'll need an injection of cash to continue its growth. Bank loans are often times too restrictive, time intensive and highly challenging to obtain these days. In this situation, a revenue based loan may be the best solution. If you use it wisely, a revenue based loan could do wonders for your salon.
Merchant Cash Advance
A Merchant Cash Advance (MCA) can provide salon owners with an upfront fixed amount of cash in as little as 24 hours. The funding amount is based upon a percentage of the businesses credit card receivables or daily cash balances using historical credit card receipts and/or bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables or cash available plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily or weekly basis until the obligation has been met. An MCA is not technically a business loan, and as such MCA's are not limited in what rates they charge or what terms they establish and therefore often have high interest rates. For this reason it is very important for a business owner to be completely aware of how the MCA product works and how it could affect their business. MCA's are good options for small business owners who may not have strong credit but have lots of credit card activity or steady cash flow and need financing quickly.
Cash Flow Loans
Even if your salon is growing, you may find yourself needing extra cash to cover day-to-day expenses such as payroll, rent and inventory, or to pay for short-term projects that could grow your revenue in the long run. Uneven cash flow is one of the biggest challenges of salon owners. For this type of business financing, lenders provide you funds and use your future expected cash flow as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. These are primarily used for working capital or take advantage of short-term ROI opportunities. Your credit scores will usually be checked, but they play less of a role. As the name indicates, the lender is more concerned with inspecting your cash flow (usually bank statements) to approve your application. Turnaround time is another great feature of a cash flow loan, as funding usually takes place in a matter of days.
Hair salons, nail salons, barber shops and spas all over the U.S., are prospering after a small business loan from LVRG. If you believe in your salon or spa, we’ll help you take that next step to realizing your goals. Get started today and we’ll take care of the rest!