Beauty Salon Feasibility Study in New Hampshire

A small state that leans on salons

New Hampshire's salon record is small in dollars but heavy in weight. The 92 approvals from FY2017 to FY2026 total $12.6 million and rank the state 26 of 54, yet beauty salons place 5 of 39 among New Hampshire's asset classes, and a 1.16x location quotient shows them taking more of the state's SBA lending than they take nationally. The typical ticket is modest: a median of $87,500, 0.88x what salons borrow nationally at the median. No measure here, whether median size, cancellation or charge-off, separates the cell from both New Hampshire's all-class record and salons nationwide, so what defines this cell is its share of a small market.

An unusual reliance on SBA 504

The middle half of loans runs from $30,000 to $167,250. Even so, 16 of the 92 approvals went through SBA 504 against 76 under 7(a), a notable share for a class of small loans, and Granite State Economic Development Corporation alone accounts for 13 of them, worth $2.4 million. On the 7(a) side, TD Bank, National Association holds 21 loans totalling $987,000, Eastern Bank 9 and Primary Bank 5. Franchises are only 6.5% of loans. Rockingham County has 45 approvals and Hillsborough 26, with Merrimack at 6. Annual counts are thin and uneven, peaking at 19 in FY2019; FY2026 shows just 4 loans but $2.9 million.

Cancellation and loss record

No less than 7.8% of New Hampshire salon approvals dated FY2017 to FY2024 ended in cancellation, and that is also the ceiling, since no loan in the cohort awaits disbursement. Among the 53 loans disbursed in FY2017 to FY2021, 3.8% have been charged off so far, while the five-year charge-off rate is 0.00%: every loss on record came after a salon's fifth year. These are floors.

For a New Hampshire salon, a feasibility study has to test both kinds of deal. A small 7(a) loan needs demand for the services within a short drive, a lease and build-out cost that fit the ticket, and a cash flow that covers debt service after stylist pay. A 504 purchase needs all of that plus an appraisal that supports the building on its own as real estate. Since the losses on record arrived after year five, the study should also show the business carrying its debt after the first lease or the first wave of staff turnover.

No coding limitation is recorded for this class in our data; the counts follow the borrower's industry as entered on the SBA loan record.