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Business Loans for Nail Salons

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How to Find the Best Financing for Your Nail Salon

It’s no secret that the nail salon industry has had difficulty getting nail salon financing 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 salon loans or any bank loan from a traditional lending route, for that matter. It’s not you, but the industry. However, these are new times. With the growth of new alternative business lenders, the nail salon industry has more financing access than ever before.

Traditional lenders see business financing as extremely risky, which means qualifying for bank loans is difficult. These lenders won’t give nail salon loans out to just anyone. They’ll likely require a borrower with an excellent credit score, a robust business plan, and significant amounts of collateral for your nail salon loan. Some could even ask you about your relevant hospitality services experience as well. We’re not your traditional route for nail salon loans. AdvancePoint Capital’s services, accompanied by our extensive network of business funding providers, offer you the best financing options to get the funding you need.

AdvancePoint Capital has been experienced as a funding provider for the nail salon 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 for your nail salon or salons and spas. Contact us a see the difference in our services.

Long-Term Small Business LoansLong-Term Small Business Loans

Long-term business loans are always the most desirable as they offer the most extended terms to repay, typical loan term from 2 to 7 years. Long-term loans are a lump sum provided upfront with rates that start around 6% with monthly payments.

These loans require high credit standards and gross revenue as they are bank loans for an established nail salon with at least two years in business. Significant amounts of additional paperwork are required, and the process can take up to a week or more for many nail salons. This is a great product for salon proprietors with long-term growth plans.

Benefits:

  • Low-interest rate starting from 6%
  • Term loans from 1 to 7 years to repay
  • Accommodates a larger loan amount
  • Monthly payments

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Long-Term Business Loans

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Short Term Small Business Loans

Short-term loans are term loans that provide a lump sum of money that is repaid over terms of 6 to 18 months. When approved, you get a fixed amount for a set amount you have to pay back. Short-term loans have a fixed payment auto-deducted from your bank account monthly, bi-weekly, weekly, or in some cases daily out of the bank account.

Limited paperwork is required, and credit requirements are more lenient than banks or traditional term loans. The difference between loan terms will impact approval.

Benefits of Short Term Business Loans:

  • Excellent to poor credit score considered
  • A business loan amount as little as $10,000 up to $500,000
  • Lower monthly or annual revenue requirements than those of traditional loan terms
  • Fast and simple application process. Capital within 24 hours

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Short Term Business Loans

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Business Lines of Credit for Nail Salons

A business line of credit is a small business financing option that offers a flexible feature that a short-term loan does not. It works like a credit card in that it is a revolving credit line and allows you to draw money out and then repay at any time with you only paying principal and interest on your outstanding balance. Lines of credit have a credit limit that you cannot exceed and is set at the time of consummation.

Benefits of a Line of Credit

  • Interest rates from 4% to 7%
  • Loan terms from 3 to 25 years
  • Attractive repayment terms
  • A variety of acceptable uses of money
  • Fast and simple application process

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Business Line of Credit

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SBA Paycheck Protection Program (PPP) Loan

The Small Business Administration (SBA) has established the SBA Paycheck Protection Program loan that will provide loans to small business owners (including the nail salon industry) throughout the country affected by the COVID-19 crisis and need financial help. Contact AdvancePoint Capital for additional information about the PPP process.

Merchant Cash Advance for Nail Salons
Merchant cash advance (also now as future receivables purchase and sales agreements) provide an upfront lump sum of money to businesses in exchange for a fixed percentage of the businesses’ future sales. Repayment is typically made daily or weekly. An ACH payment auto deducted from a business’s bank account, or the percentage is taken out of future credit card sales until the payback obligation is met.

Terms are expressed as a future sale, so you are given a fixed amount and then responsible for paying back a greater amount through a fixed percentage of future sales. The difference between the amount given and the amount paid back to complete the agreement is your flat cost of money. The estimated time to repay is typically 6 to 18 months, but there are no term limits as the repayment is based on future sales. This product is very popular with the nail salon industry due to high credit card sales.

Benefits of Merchant Cash Advances:

  • Flexible repayment terms attached to future sales
  • Excellent to poor credit score considered
  • Provides funds to owners with Sub Prime Credit
  • Serves lower revenue businesses
  • Payments fluctuate to future sales controlling the margin of profit.
  • Fast and straightforward process. Capital within 24 hours

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Small Business Administration (SBA) Loans

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Business Credit Cards for Nail Salons

Business credit cards work the same as personal credit cards. They are a revolving credit with a credit limit with a minimum monthly payment requirement typically lower than that of a small business loan. You are issued a plastic card with an account number that can be used online and in-person for any purchases. You only pay interest based on the current principal. This product is very popular with the nail salon industry and is used in conjunction with other financing options.

Benefits of Business Credit Cards:

  • It can be used 24 hours a day, seven days a week.
  • No limitations on the use of funds
  • Flexible monthly payments payments
  • Principal & Interest rates
  • Fast and simple process. Capital within 24 hours
  • Serves lower revenue businesses

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Benefits of Nail Salon financing

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 nail salon, failing to meet payroll is not an option, so it’s essential to have a working capital loan to handle industry ups and downs and stabilize the business bank account. From working capital to seasonal needs, nail salon financing is a sound option.

Business Facility Expansion/Renovations

Your nail 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 nail salon financing. This type of need is usually capital intensive and will require unique financing solutions to support the expansion and renovation opportunities.

Advertising

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 nail 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 nail 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.

 

Supplies

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.The fast, convenient and straightforward process to get Nail Salon Financing – now! Get Your Quote Today by filling out our simple form.

How Do You Get Nail Salon Financing?

There are many options to consider, and with such a wide range of lenders and financing options available, it can be challenging to get started with the application process. Lenders will want some pertinent information, regardless if they’re an online lender or from a traditional financing institution. This information mainly serves to confirm your small business’s financial history 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 seasoned nail salon. 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 show that you can overcome obstacles and tackle challenges that come with nail salons. 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 lenders will require so that they can assess their nail 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, 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 nail salon financing.

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 nail 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 nail 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.

The fast, convenient, and straightforward way to get the money you need for your small business – now!

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Frequently Asked Questions

The answer really depends on what type of nail salon loans you’re considering. Some nail salon loans are far easier to qualify for, such as a business cash advance. In contrast, other loan choices could be a little more difficult for business owners, such as a term loan.

Credit score, time in business, and various financial statements will affect whether or not it’s challenging to obtain a loan for your nail salon. So, it’s up to the nail salon owners seeking financing options to make sure you research various possibilities and determine which loan they can apply for with success.

Again, this really depends on which nail salon loans you’re considering. Different nail salon loan options will have additional application requirements — so there’s no one size fits all solution to this question.

However, there are some typical avenues that many business owners take to open up a nail salon. Ensure you have a sound business plan, projected financial statements, ownership and affiliation documents, business certificates or licensure, loan application history, income tax returns, and a resume available. All of these items could play a critical role in opening up a new nail salon.

Depending on your lender, you may need to offer up a down payment or real estate as collateral for your nail salon loan. Typically, a down payment of around 10% is standard for nail salon equipment financing. However, that may change based on terms or other features of various loan options. For example, a term loan has very low interest rates.

Additionally, they allow applicants to cover less than the 20% down payment. And short-term nail salon loans don’t usually require any down payment at all. So, depending on the term loan option you’re seeking, you may find various loan down payments or real estate collateral for each.

Revenue will depend entirely on your location in the country, marketing skillsets, the number of customers, the types of services you offer(men & women?), your process, and how much capital you have to invest in your business’s growth. We suggest building relationships with other nail salon owners in the area if you are looking for input to operate your business.

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