Funding Your Salon Expansion: Loans and Lease Options

Your client list is growing, your stylists are booked solid, and your space is starting to feel a little too cozy—that's when you know it's time to expand. Whether you're adding stations, opening a second location, or upgrading your equipment, salon expansion is an exciting milestone. But like any major business move, it requires funding.

This guide will walk you through the smartest loans and lease options for salon expansion, so you can grow your business without stretching your finances too thin.

Why Salons Expand—and What It Costs

Salon owners expand for many reasons:

• Client demand outpaces capacity

• Opportunity to move into a higher-traffic area

• Plans to diversify services (e.g., spa treatments, nail services)

• Hiring more stylists or specialists

• Refreshing the brand with a more modern space

Typical expansion costs can include:

• Leasehold improvements and interior renovations

• Salon chairs, mirrors, shampoo stations, and lighting

• Booking software and POS systems

• New inventory and retail display shelves

• Marketing for your expanded offerings

• Additional licenses and insurance

Depending on your scope, salon expansion costs can range from $20,000 to over $250,000.

Top Financing Options for Salon Expansion

1. SBA 7(a) Loans

Backed by the U.S. Small Business Administration, SBA 7(a) loans offer salon owners access to up to $5 million in funding with competitive terms.

• Uses: Buildouts, equipment, working capital

• Terms: Up to 10 years for most uses; up to 25 years for real estate

• Interest Rates: Typically 7%–9.5%

• Requirements: Good credit, financial documentation, and a strong business plan

• Learn more at SBA.gov

Best for: Large salon expansions or second-location launches.

2. Equipment Financing

Need to upgrade or buy more styling chairs, shampoo units, or dryers? Equipment financing lets you purchase high-cost assets without a huge upfront payment.

• The equipment serves as collateral

• Loan terms: 2–7 years

• Often requires little to no down payment

Best for: Furniture, fixtures, tools, and salon-specific equipment.

3. Business Line of Credit

A business line of credit offers flexible access to cash. You draw funds as needed and only pay interest on what you use.

• Credit lines range from $5,000 to $250,000+

• Replenishable after repayment

• Good for recurring or unexpected costs

Best for: Gradual expansion projects or covering cash flow gaps during remodeling.

4. Working Capital Loans

If you need a fast cash injection for immediate expansion needs, short-term working capital loans may be the answer.

• Quick approval

• Loan amounts from $10,000 to $500,000

• Terms typically 6 to 24 months

Best for: Short-term remodels or marketing campaigns tied to expansion.

5. Salon-Specific Lenders and Lease Programs

Some lenders specialize in the beauty industry and understand your specific needs. You may also lease equipment rather than buy it.

• Equipment leasing reduces upfront cost

• Maintenance often included in lease agreements

• Salon finance companies offer tailored loan packages

Check out:

• ShearShare

• GreenSky for small businesses

• Credibly

• National Funding

6. Commercial Lease Options

If your expansion involves moving to a larger space or opening a second location, consider your lease terms carefully.

• Negotiate tenant improvement allowances

• Look for flexible renewal clauses

• Consider subleasing if uncertain about long-term growth

• Work with a commercial real estate broker who understands the salon industry

7-Step Checklist for Financing Salon Expansion

1. Define your expansion goals and cost estimates

2. Determine your ideal timeline and budget

3. Choose the right financing method based on your growth plan

4. Prepare documents: business plan, P&L, bank statements, credit history

5. Apply with lenders or leasing companies that specialize in service-based businesses

6. Finalize renovation, hiring, and marketing plans

7. Track return on investment (ROI) post-expansion to ensure profitability

Real Example: How a Boutique Salon Doubled Revenue

A boutique hair salon in Austin, TX used a $75,000 SBA 7(a) loan to renovate their space, add two new stations, and install a new shampoo area. The owner also invested in upgraded booking software and a retail wall for product sales. Within 6 months, client wait times dropped by 40%, and monthly revenue increased by 80%.

Common Mistakes to Avoid

• Expanding too quickly: Make sure your current business is financially stable first

• Underestimating soft costs: Include design fees, permits, and downtime in your budget

• Choosing the wrong loan type: Match loan terms to the life of what you're buying (e.g., 5-year loan for 5-year equipment)

• Skipping cash flow analysis: Ensure monthly loan payments are sustainable

Helpful Resources for Salon Owners

• SalonToday Business Resources

• SCORE Mentorship for Beauty Entrepreneurs

• SBA Lender Match Tool

• Professional Beauty Association (PBA)

Conclusion: Expand with Confidence and Control

Salon expansion is a big leap—but with smart financing, it doesn’t have to be a risky one. Whether you’re remodeling, hiring, or opening a new location, the right loan or lease strategy allows you to scale sustainably. By planning ahead and choosing the right funding path, you can take your salon business to the next level without compromising your cash flow.