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Commercial Finance For Salons

Finance for salons

In the UK, the beauty industry is huge. Including hair salons, nail bars, personal grooming spas, and aesthetics companies there is a salon for every beauty requirement; and there is also commercial finance tailored for salons. Worth an estimated £27 billion in 2022, salons are a large part of the UK economy, however, despite demand for services there may be times when salon owners require additional funds. Commercial finance can be invaluable to ensure that a salon can get started in the first place and maintain viability. Types of finance for salons can include a business loan, merchant cash advance, and asset finance, keep reading to find out more. 

UK Beauty Industry

It is well known that the British high street is in decline, however, where many retail outlets are closing hairdressers and other beauty salons are opening and thriving. Many hair and beauty salons are owned by sole traders, these may be a single shop front, or even a mobile or home business; however, there are also some larger chain salons with multiple locations. No matter whether you are a large chain or a sole trader, at times you may require additional cash input to continue trading successfully. 

There are many types of commercial finance available, and it would be wise to seek expert advice to ensure that you take out the most appropriate finance for your requirements. Contact MC Commercial Finance to book an appointment to get advice tailored to your specific salon. Most commonly hair salons and other beauty businesses will utilities the following forms of business finance, and we will discuss each in more detail below:

  • Business loan
  • Merchant cash advance
  • Asset finance – vehicle if mobile, computer systems 

Business Loan For Salons

business loan is the most well-known type of commercial finance. A loan provides a cash injection into the business that can be spent as required. Commonly used when starting out to help fund start-up costs are there may be specific loans available to fund initial costs such as rent, renovation of premises, equipment, or staff costs. A standard bank loan may not be available to a new business without any trading history as affordability would be an issue, however, as mentioned start-up loans or even grants may be available. 

Established businesses are more likely to be eligible for a bank loan, contacting a dedicated commercial finance broker such as MC Commercial Finance is the best way to get advice on whether a business loan is a suitable option for your salon. Useful when expanding, renovating, or moving premises, a loan can help support expansion and growth of your beauty salon. 

Merchant Cash Advance for the Beauty Industry 

A less well know type of business finance is a merchant cash advance (MCA). An MCA is a popular type of finance for any business that utilise a card payment terminal. If your salon is cash only, a merchant cash advance would not be an available option. MCAs require a payment processing terminal and a creditor that works with that terminal. Typically, you would be eligible to borrow up to one month worth of turnover via the terminal. Therefore, whether this type of finance is appropriate depends on how much cash you need to borrow versus average turnover.

If you are accepted for a merchant cash advance, the cash can be used for a wide variety of business purposes including purchasing equipment and supplies, paying staffing costs, insurance, and industry memberships. An MCA is repaid via payments taken through the terminal, usually at a rate of 10% per month until the loan is paid. You can find out more about merchant cash advances here.

Asset Finance for Hair and Beauty Salons 

Another useful type of commercial finance for hair salons and beauty outlets is asset finance. Equipment in salons such as massage tables, treatment chairs and stations, as well as computers necessary for bookings, marketing, and essential administration are all costly purchases. Asset finance is a specific type of finance that enables the purchase of equipment for business use without the need for a large cash outlay. Depending on the type of purchase you may rent, lease, or finance to own the equipment with the terms differing depending on the requirements. If you are a mobile hairdresser or beautician you may even be able to use asset finance to aid the purchase of a dedicated vehicle enable you to travel between appointments transporting all of the required equipment. 

Commercial Finance For Salons

As you can see there are several types of commercial finance that may be suitable for your hair and/or beauty salon. We can’t stress highly enough that every business has individual requirements and seeking advice from an expert will help to ensure not only that you get the right type of finance for your salon but also that you get the best possible deal and terms. Brokers often have access to exclusive deals, and with their vast experience they are best placed to provide advice and ensure that the application process is as simple and hassle free as possible. 

MC Commercial Finance Ltd is authorised and regulated by the Financial Conduct Authority 
(Reg number 948719).
MC Commercial Finance Ltd is an independent credit broker not a lender.
Company Registered Number: 12472873