Beauty Salon Feasibility Study in the Chicago-Naperville-Elgin, IL-IN Metro Area

Salons in Chicago: small loans, many borrowers

SBA approved 298 beauty salon loans around Chicago-Naperville-Elgin from FY2017 to FY2026, worth $69.0 million, so the typical dollar amount is modest. The market holds position 4 of 546 nationally for the class, and salons hold 6 of 39 inside Chicago; a location quotient of 1.09x leaves the local share a touch above the national mix. The median is $117,000, which is 1.17x the national figure, and half the loans fall in a band from $40,000 to $249,375. A request above that top figure will need an explanation, such as a purchased building.

Of the 298 loans, 271 used SBA 7(a) and 27 used SBA 504. Franchised units are 11.4%, a minority. Cancellations among the FY2017 to FY2024 Chicago approvals start at 10.0% and reaches 12.3% if approvals not yet disbursed are counted as cancelled. Of the 111 loans that were funded in FY2017 to FY2021, 5.4% show as losses, a minimum, while the five-year rate stays blank because SBA holds it back for this cohort. Lenders and borrowers should treat the cancellation level as the more reliable signal here.

Banks and counties

The Huntington National Bank holds 58 SBA 7(a) loans and $7.2 million, with U.S. Bank, National Association at 41 and $4.2 million. Northeast Bank (ME) has 12, PNC Bank, National Association 10 and JPMorgan Chase Bank, National Association 10. Small Business Growth Corporation is first on SBA 504 with 13 loans and $3.1 million, and Regional Development Company second with 6 and $2.5 million. Treat the list as SBA's holder data, not an appraisal of any lender. Cook County, IL carries 164 loans, then DuPage County, IL at 32, Lake County, IL at 27, Kane County, IL at 22, Will County, IL at 19, Lake County, IN at 16 and Porter County, IN at 9.

Approvals ran at 26 loans in FY2017, 34 in FY2019, 18 in FY2020 when dollars reached $15.9 million on far fewer loans, and 45 in FY2025 before settling at 33 in FY2026. That FY2020 jump in dollars deserves a question from any reader. Chicago's total counts a loan merely when the 2023 delineation can place its county.

Testing a Chicago salon

A salon study counts nearby households and workers around a Cook or DuPage County site, plus the chairs already competing for them. It weighs plumbing, chairs and fit-out against $117,000, tests stylist retention and booth rent or commission, and shows that ticket volume carries debt service. Behind every Chicago report stands one name; Daniel Smith, MAI, vouches for it, so treat the 298 approvals as background and nothing more.