SBA lenders approved 2,473 7(a) loans to beauty salons between October 2023 and June 2026, about $485 million from 365 lenders. The median loan was $73,000, under half the national median of $150,300, at a median rate of 10.5% against 10.25% nationally. Acquisitions were only 4.6% of loans, at a median of $303,000. Lenders read the salon's model first (commission, booth rental or suites), then the filed returns, the stability of its stylists and their clients, and the owner's license and experience.
| Measure | Beauty Salons | All industries |
|---|---|---|
| SBA 7(a) loans approved | 2,473 | 162,355 |
| Median loan | $73,000 | $150,300 |
| Middle half of loans | $30,000 – $218,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 2.5% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.5% – 11.75% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 114 (4.6%) | 16,849 (10.4%) |
| Median acquisition loan | $303,000 | $693,000 |
| Lenders that made these loans | 365 | 1,648 |
| SBA 504 loans (real estate, equipment) | 146 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 2,473 (Oct 2023 – Jun 2026)
- Median loan
- $73,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- Fixed-rate share
- 19.9%
- Acquisitions
- 114 loans (4.6%), median $303,000
- SBA 504
- 146 loans, median $316,000
What SBA lenders approved for salons
Beauty salons (NAICS 812112) cover hair salons and full-service beauty salons offering cuts, color, styling and related services; nail salons and barber shops have codes of their own (see nail salons and barber shops). From FY2024 through June 2026, 365 lenders approved 2,473 7(a) loans to salons, worth $485,215,718. These are small loans to small businesses: a median of $73,000 and a median of 4 jobs supported.
| Figure | Beauty salons | National | Reading |
|---|---|---|---|
| Median loan | $73,000 | $150,300 | Chairs, stations, a remodel, working capital |
| Middle half | $30,000 to $218,000 | A quarter of loans were $30,000 or less | |
| 90th percentile | $493,700 | Purchases, larger salons and real estate | |
| Loans of $1 million or more | 63 (2.5%) | Rare | |
| Median rate | 10.5% (middle half 9.5% to 11.75%) | 10.25% | Small loans carry higher allowed rates |
| Fixed-rate share | 19.9% | Nearly one loan in five fixed | |
| Start-ups | 16.1% of loans | New salons are financed, with scrutiny | |
| Franchises | 8% of loans | Mostly independent owners | |
| Acquisitions | 114 loans (4.6%), median $303,000 at 9.75% | 10.4% | Salons change hands less often with SBA financing |
Size drives price here. SBA caps variable 7(a) rates at the base rate plus 6.5% for loans of $50,000 or less and plus 6% from $50,001 to $250,000, against plus 3% above $350,000. The median salon loan of $73,000 sits in the plus-6% tier and at least a quarter of salon loans sit in the plus-6.5% tier, which is much of why the median rate of 10.5% sits above the national one. SBA Express, which goes up to $500,000 with a 50% guaranty, carried 39.8% of salon loans. See SBA maximum interest rate and SBA 7(a) vs SBA Express.
Three salon models, three different credits
Before reading the numbers, a lender needs to know how the salon makes money, because the same chairs can produce very different financial statements.
| Model | How revenue appears | What the lender weighs |
|---|---|---|
| Commission or employee salon | Service and retail revenue, with stylist pay as payroll or commission | Higher revenue and more control, but thin margins; stylist retention and payroll compliance |
| Booth or chair rental | Rent collected from independent stylists who keep their own service revenue | Steadier, smaller income; whether renters stay and pay; the salon has less control over service quality |
| Salon suites | Rent for private suites leased to independent professionals | Occupancy and turnover of tenants, and whether the business is an active operating business rather than passive rental under SBA's eligibility rules |
Many salons mix models, with some employed stylists and some renters. That is fine, but the tax return should show it clearly, and the lender will want a roster: who works there, on what basis, and for how long. A commission salon whose returns show strong revenue and weak margins will be asked where the money goes; a booth-rental salon with a vacant third of its chairs will be asked why.
Stylists, clients and the tax return
Clients follow stylists. In most salons, the client relationship belongs to the stylist, not the business. A senior stylist who leaves for the salon down the street, or opens a suite of their own, can take a meaningful share of revenue. Lenders ask how long the key stylists have been there, what share of revenue the top few produce, and whether any agreements limit solicitation of clients (enforceability of such agreements varies by state). A salon with long-tenured staff and revenue spread across many stylists is a much stronger credit than one built on the owner and one star.
Cash and tips. SBA lenders underwrite on filed tax returns and verify them against IRS transcripts. Cash services that never reached the return do not exist for underwriting. Point-of-sale reports and card processing statements that tie to the return make the file credible. Coverage is then tested the usual way: SBA requires at least 1.15x, and 1.0x globally once the owners' personal debts are included. For a salon owner who also works the chair, the owner's own pay is part of that picture; see global cash flow.
Licensing. States license both the salon as an establishment and each cosmetologist. The lender will want to see both current, and a start-up owner without a license or salon management history is a harder file.
In a salon, the collateral that matters most walks out the door every evening. Lenders want evidence it comes back.
Buying a salon
Only 114 loans, 4.6% of the total against 10.4% nationally, financed a change of ownership, at a median of $303,000 and a median rate of 9.75%. Salons do sell, but a lender financing one is lending against goodwill that sits largely with the stylists, and some salon purchases are small enough to be done with seller financing or cash. See financing a salon acquisition.
At the median purchase size and above, SBA's valuation rule usually applies: where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation, and the loan cannot exceed it. Salon equipment is modest, so most of the price is goodwill. The other rules are SBA's standard ones: at least 10% equity; a seller note counting for up to half of it only on full standby for the life of the loan; no earnout. The seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, and in a salon that period is best spent introducing the buyer to clients and keeping stylists in place. From the same date, a change of ownership must show 1.25x coverage on historical results. See SBA's business valuation requirement.
Real estate and refinancing
SBA 504 financed 146 salon projects at a median of $316,000, a sizable number for an industry with small loans: salon owners buying a small building or a commercial condominium for their own use. 504 typically splits a project 50% bank, 40% CDC and 10% borrower, and requires the owner to occupy at least 51% of an existing building. A 7(a) can also finance real estate with maturities up to 25 years. See SBA 7(a) vs SBA 504.
Salons take most payments by card, which makes them frequent targets for merchant cash advances. SBA will not refinance an active advance, and from 1 October 2026 an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. See refinancing cash advances for salons and spas.
Preparing a salon's file
The core is SBA's standard list: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more. For a salon, add:
- A stylist roster: each person's role, pay basis (employee, commission or renter) and tenure
- Booth or suite rental agreements, if any
- Point-of-sale and card processing reports that tie to the returns, with service and retail revenue separated
- The establishment license and the owner's cosmetology license
- The lease, with its remaining term and options
- The owner's resume, supporting Form 1919's management experience
Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See the package.
Common questions
- How much can a salon borrow with an SBA loan?
- Most salon loans are small: the median 7(a) loan from October 2023 to June 2026 was $73,000, and the middle half ran from $30,000 to $218,000. Larger loans, up to the 7(a) limit of $5 million, are possible for purchases, multi-location owners and real estate, but only 2.5% of salon loans were $1 million or more.
- Does it matter whether my salon rents booths or employs stylists?
- Yes. Booth rental produces steadier, smaller rent income; a commission or employee salon produces more revenue with thinner margins and more payroll risk. Lenders underwrite each differently, and a suite business also has to show it is an active operating business under SBA's eligibility rules.
- Why is my salon's SBA rate higher than average?
- Mostly loan size. The industry's median rate was 10.5% against 10.25% nationally, and SBA allows higher maximum rates on smaller loans: base plus 6.5% up to $50,000 and base plus 6% from $50,001 to $250,000.
- What do lenders worry about when financing a salon purchase?
- Whether clients stay after the sale, which mostly means whether the stylists stay. They will look at stylist tenure, how concentrated revenue is among a few people, and how the seller will introduce the buyer during the consulting period.
- Can I get an SBA loan to open a new salon?
- Yes. Start-ups were 16.1% of salon loans. Expect to show a cosmetology license or salon management experience, put in at least 10% of total project costs, and present a build-out budget, a lease that runs as long as the loan and a monthly projection.