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Business loans for hairdressers and beauticians

Starting your own beauty salon or hairdresser? Compare business loans today.

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You may need some finance when you're looking to start your own hairdresser or beauty salon, buy an existing business or upgrade your own salon. Luckily, there are a number of business loans for hairdressers and beauticians on the market.

The beauty industry is a lucrative industry in Australia. It currently generates over $6.5 billion in per year, and collectively employs over 120,700 employees.

If you're looking to break into or expand within this profession, this guide will help to break down your loan options, and show you how to compare business loans.

What is a business loan for hairdressers and beauticians?

A business is any form of finance to help you fund your business. From buying the premises to purchasing the equipment, business loans are often a necessary part of entering or flourishing in any industry. If you're in the hair and beauty trade, or planning to enter it, a business loan can help you with the following:

  • Pay for expensive equipment
  • Start a new business
  • Expand or upgrade your existing business
  • Hire more staff
  • Cover a temporary cash shortage

How much can I borrow?

You can borrow anywhere from $5,000 to upwards of $2,500,000 with a business loan. How much you are approved for will depend on factors such as:

  1. What the loan purpose is and how much funding you require
  2. What type of finance would suit your business
  3. Your financial circumstances; i.e. your credit history
  4. Whether the loan is secured or unsecured

How much do I need?

Considering how much you need is the first important step when considering a business loan as a hairdresser or a beautician. What's the purpose of your loan? If you're looking to purchase a salon premises, the amount you need could vary largely depending on the size and location of your salon. If you're looking to finance equipment, you might expect to pay the following for salon equipment:

Furniture

  • Salon chairs - $181.50 to $392.48
  • Hair wash basin - $99.00 to $1,032.90
  • Waiting lounges - $279.40 to $385.22
  • Trolleys - $86.90 to $290.40
  • Reception desk - $500.50 to $704.00
  • Make-up station - $249.99 to $699.99

Electrical

  • Computer - $300 - $3,000
  • Hair dryers - $59.99 to $309.99
  • Hair curlers - $89.99 to $189.99
  • Nail drills/lamps - $69.99 to $799.99
  • Hair straighteners - $129.99 to $349.99

Extras

  • Hair accessories and supplies - $2.99 to $769.99
  • Nail colours, accessories and supplies - $1.99 to $579.99

Beautiful smiling young woman curling her long brown hair, making new hairstyle in the hair salon.

Prospa Business Loan

Prospa Business Loan

  • Loans up to $300,000
  • Same-day turnaround
  • Repay early without penalty
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100% confidential application

Prospa Business Loan

Get access to a small business loan from $5,000 - $300,000.

  • Loan Security: No asset security required to access funds up to $100,000
  • Interest rate: from 9.9% p.a. to 26.5% p.a.
  • Comparison rate: from 11.75% p.a. to 33.5% p.a.
  • Establishment fee: 3% origination fee
  • Minimum loan amount: $5,000
  • Maximum loan amount: $300,000
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Business loan for hairdressers and beauticians you can compare today

Data indicated here is updated regularly
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Filter Values
Prospa Business Loan
$5,000
$300,000
3 months to 3 years
3% origination fee
Small business loans are available from $5,000 - $300,000 on terms of up to 3 years. At least six months trading history and a monthly turnover from $6,000 is necessary.
Valiant Finance Business Loan Broker
$5,000
$1,000,000
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
Max Funding Unsecured Business Loan
$2,000
$300,000
1 month to 1 year
$0 application fee
An unsecured business loan from $2,000 that offers convenient pre-approval and no early repayment fees.
OnDeck Business Loans
$10,000
$250,000
6 months to 2 years
3% of loan amount
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
Westpac Business Loan
$5,000
$1,000,000
1 to 30 years
$0 application fee
Purchase a new vehicle, equipment or support your cash flow with a business finance solution from Westpac.
ANZ Secured Business Loan
$10,000
$10,000,000
Up to 15 years
$600
Benefit from a low rate when you secure this loan with property and/or business assets. Loans from $10,000 available.
ANZ Unsecured Business Loan
$10,000
$1,000,000
Up to 15 years
$600
Apply for a loan from $10,000 with no security required and benefit from flexible repayment terms.
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What type of salon loan should I consider?

Here are the most common business loans:

Loan

Amount

Pros

Cons

Equipment loan

Borrow the cost of purchasing equipment
  • Borrow money to purchase major equipment, such as tanning machines and salon chairs
  • Flexible payment options
  • Often fees and charges with this loan
  • Can be complicated to arrange

Line of credit

$10,000- $100,000,000
  • Get cash to cover expenses when you need it
  • Only pay interest on what you spend
  • Lower risk than term loans
  • Need a good credit history
  • Can't really use this loan for buying a whole business or for buying major equipment

Business Overdraft

$10,000- $100,000,000
  • Unsecured loan linked to a business bank account
  • Can cover unforeseen expenses when you're low on cash
  • Requires an existing business account
  • Only gain access to overdraft funds when other funds are depleted

Term loan

$10,000- $500,000
  • Borrow a single, large sum which you pay back over time
  • Requires fixed, regular repayments
  • Can cover major expenses, such as fit-outs, upgrades and equipment purchases
  • A large loan exposes you to more risks
  • Term loans usually require security
  • Lack of flexibility

Business credit card

Depends on card
  • Spend money as you need it
  • Make monthly repayments
  • Requires you to keep track of spending
  • Requires good history

Unsecured cash loan

$1,000- $100,000
  • Get quick cash without putting up security
  • Good for short, sudden cash shortages
  • An unsecured loan can put you and your business at risk if you cannot make repayments
  • Higher fees and interest rates

The type of loan you opt for can depend on the following factors:

  • Your assets. If you can put up residential property or a vehicle as security, you have more loan options. Sometimes, you can use equipment from your business itself as security, such as the equipment you're looking to purchase.
  • Your finance needs. An equipment loan is no use if you want to hire more staff. A term loan can help you upgrade your business and equipment, but might be too slow if you need cash quickly.
  • Your credit history. It's harder to get certain types of finance, like credit cards or a line of credit, if you have poor credit history.

Am I eligible?

Eligibility criteria will vary from lender to lender, so make sure that you read each lender's specifications carefully prior to submitting an application. To ensure that your loan application has the highest chance of succeeding, you need to do the following:

  • Get qualified

    If you're a licensed beautician who's worked in the industry for decades, you'll have a much easier time getting a bank to lend you money. Make sure you have the necessary qualifications for your industry and gain experience if you haven't got any.

  • Have a good business plan

    A detailed business plan sets out exactly how you will serve customers and bring in cash. If you're starting a business from scratch, a good business plan is absolutely essential.

  • Put up security

    If you own a property or a valuable vehicle, you're more likely to get a loan (and on more favourable terms). If not, can you find someone who does, to act as a guarantor on your behalf?

  • Get your financials together

    If you're already running a beauty salon or hairdressers, you'll need to show a lender your books. Prepare your tax returns, a statement of profit and loss and a balance sheet to demonstrate the financial health of your business.

Shot of an attractive young woman getting a massage at a spa

I'm the sole owner, will I get a business loan?

Getting a business loan for hairdressers and beauticians can be tricky as a sole trader, because lenders tend to look at individual business owners as a higher risk than partnerships. However, this will depend on your financial circumstances and how long you have been working in the industry.

If you're struggling to acquire finance as a sole business owner, you also have the option of opting for a personal loan, rather than a business loan. Personal loans have less strict lending guidelines, and usually require less documentation.

I'm in a partnership, can I get a business loan?

You can definitely apply for a hairdressing or beautician business loan if you are in a partnership. In fact, more often than not, your borrowing power is increased if you're in a partnership, which means more capital for your business. You may even have more access to asset security and investment with more people at the helm.

Be wary that your business partner is reliable though, as you may be liable for their portion of the debt if they default. It is wise to seek legal advice before entering into a loan contract with a partner.

What costs do I need to consider?

There are many costs to think about with running a salon that may require a business loan as a hairdresser or a beautician. At the very least, you'll need to think about the following:

  • Equipment

    A professional hairdresser needs an array of expensive specialist tools. A beauty salon requires massage beds, spa baths and other specialised equipment for skin and facial treatments.

  • Premises

    Buying or renting a commercial premises is a major cost for any hairdresser or beautician (unless it's the case that you run your business from home, or provide your services in customers' homes).

  • Staff

    Hiring staff allows you to serve more customers and make more money. Staff wages are a significant, but necessary, cost of doing business. You can get a clear idea of wage levels by looking at award rates for your industry and looking at job advertisements.

  • Utilities

    You'll need to pay your electricity bills, so don't forget to factor that in.

  • Qualifications

    Professionals working in the hair and beauty industry must follow the laws and regulations of their state. Hairdressers require a qualification. Beauty salons must comply with health and safety regulations.

Tips for buying an existing beauty salon or hairdressers

Buying an existing business is a serious undertaking. You may be buying just the business and leasing the premises (leasehold) or buying a business and a commercial property (freehold). Either way, you need to do your research and seek expert advice where required.

Ask yourself these questions:

  • Am I buying a profitable business?

    Carefully examine the business's accounts to determine both the revenue (the money coming in) and profit (what's left over after all your costs are covered).

  • Am I paying a fair price?

    Even if the business you're buying is a huge success, you could still be overpaying. Look at how much you expect to make from the business per year and work out how long it will take to pay back the purchase cost.

  • Is the business's current success likely to continue?

    Look at market trends, changes in technology and the demographics of the surrounding area. A hair salon situated in a busy shopping mall is likely a valuable business. But if the nearby train station is shutting down or a bigger mall is opening down the road, then maybe not.

  • What am I really buying?

    Look beneath the surface of a thriving business and see what's really going on. Could the business be saddled with crippling debt or liabilities? Is the appearance of success revealed in the final figures?

  • Is there a growth opportunity I can exploit?

    If you think a struggling business could be doing much better than it is, then you might have found a very good deal. However, you ought to be realistic about what you can achieve, and consider all of the potential risks

How can I compare business loans for hairdressers and beauticians?

Whether you're fresh out of beauty school or a small business veteran, the tips for comparing loans are the same.

Here's what you need to look at:

  • Fees. A loan's fees can really add up, so make sure that you check all fees prior to accepting a contract.
  • Repayments. Pay close attention to the repayment conditions of the loan. Some loans give you a few months before the repayments start, some require fixed monthly repayments and others only require you to pay a monthly minimum.
  • Flexibility. Being able to extend a loan can be a big advantage. Flexible repayment options can be a big help too.
  • Interest rates. Interest rates affect how much you actually end up paying over the lifetime of a loan. There are fixed and variable rates, and some loans have no interest at all.
  • Loan terms. The length of a loan matters. For example, a one-year term loan might cover some of your monthly costs, but a line of credit can help if you need to cover expenses immediately.

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FAQs about business loans for hairdressers and beauticians

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