Larkpine Lending Group, an Iowa City, IA small-business funding service, explains funding for hair salons, nail salons and barber shops: equipment financing for chairs, stations and pedicure units, term loans for build-outs and purchases, working capital for product and payroll, and the cost of merchant cash advances. Johnson County salon counts come from Census statistics.
| Beauty salon employer sites, Johnson County, IA, CBP 2023 | 47 |
|---|---|
| Under five employees | 51.1% |
| Beauty salons with no employees, NES 2024 | 270 |
| Nail salons with no employees, NES 2024 | 99 |
| Structures to compare | Equipment loans plus working capital |
Salon business loans and what they pay for
- Styling chairs, shampoo bowls and stations
- Pedicure chairs and ventilation for nail work
- Build-out: plumbing for bowls, electrical, lighting
- Retail product inventory
- Payroll or commission draws in a slow stretch
Chairs, bowls and pedicure units are equipment and can be financed on their own; see equipment financing. Product and payroll are working capital.
How much does it cost to open a barber shop or salon?
We do not publish a cost figure, because it depends on the space as well as the equipment. The cost depends on whether plumbing is already in place or has to be added; get bids for each. Estimate it from contractor bids, equipment quotes per station, opening product, signage, and two or three months of rent and payroll.
Check which licenses the shop and its stylists need before you request funding; partners may ask to see them.
Booth rent, commission and cash flow
How a shop pays its stylists changes its cash cycle. A booth-rent salon collects rent from independent stylists and carries little payroll; a commission salon collects all service revenue and pays stylists a share, so its payroll moves with sales. Partners read the arrangement because it changes what the revenue on your bank statements represents.
In the county data, Nonemployer Statistics 2024 counted 270 beauty salons and 99 nail salons with no paid employees; County Business Patterns 2023, a separate program, counted 47 beauty salon employers. The two are not added or compared. A stylist who rents a booth and has no employees may be counted among the businesses with no paid employees, not among employers.
Business loan for a hair salon, nail salon or barber shop: illustrative arithmetic
Illustration only, not an offer: a six-chair commission salon books $48,000 a month and pays stylists 45% ($21,600). A remodel closes three chairs for four weeks, cutting service revenue by about $24,000 while rent and front-desk wages continue. A working capital loan for the closure, plus equipment financing for the new stations, keeps the remodel from draining operating cash.
Card receipts, salons and advances
A salon that takes most payments by card may be offered a merchant cash advance. It is not a loan, and the cost can be high relative to the need. For buying an existing shop, an advance is a poor fit; the salon purchase article explains why and what to settle first.
Salons in Johnson County, IA by the numbers
| Type | Employer establishments (CBP 2023) | Nonemployers (NES 2024) |
|---|---|---|
| Beauty salons (812112) | 47 | 270 |
| Nail salons (812113) | 7 | 99 |
| Barber shops (812111) | 3 | 28 |
Sources: U.S. Census Bureau, County Business Patterns 2023; Nonemployer Statistics 2024. The two programs count different businesses in different years and are not added. Of the 47 beauty salon employers, 24 (51.1%) had fewer than five employees. More county data: Iowa City, IA page.
Questions a salon owner should answer first
- How are stylists paid: wages, commission or booth rent?
- How much of revenue is retail product, and how fast does it sell?
- Which chairs and bowls need replacing in the next year?
- How long is the lease, and can the space take more stations?
- What share of payments arrives by card?
Partners reading a salon's bank statements need these answers to interpret them.
Retail product inside a salon
A salon may sell shampoo, styling products and nail care. Product ties up cash on shelves the same way a store's stock does, but in smaller amounts. A line of credit can cover reorders; inventory financing may be more than a salon's product shelf needs unless the salon is opening a sizeable retail corner.
By Larkpine Lending Group · Updated