Beauty Salon Feasibility Study in the New York-Newark-Jersey City, NY-NJ Metro Area

First of 546 areas for salon loans

Out of 546 metropolitan and micropolitan areas, New York-Newark-Jersey City comes first for beauty salon loans, though within the area the class ranks only 4 of 39. SBA approved 665 salon loans here from FY2017 to FY2026, worth $125.3 million. The location quotient of 1.17x says salons make up a larger share of the area's loans than of loans nationwide, so this is a real concentration, not only a big metro. New York County leads with 107 loans, then Kings County with 62, Bergen County with 55 and Essex County with 48.

Size is where this area departs from the class: the median is $50,000, only 0.50x what the class nets nationally; half of New York-area salon loans fall between $25,000 and $190,000. Program counts run 657 for SBA 7(a) and just 8 for SBA 504, a mix that fits a business that leases its space and finances chairs, fixtures and working capital rather than real estate. Franchise flags appear on 10.4% of loans.

Lender holdings

The table of lenders shows the current holder of each loan according to SBA, a different thing from the original lender. TD Bank, National Association holds 206 salon loans worth $10.5 million, well clear of JPMorgan Chase Bank, National Association with 64 worth $7.1 million, with Manufacturers and Traders Trust Company next on 62 loans totalling $4.6 million. Further down sit Northeast Bank (ME) at 24 loans and $2.3 million, then Newtek Bank, National Association at 21 loans and $3.7 million. A borrower can read this as where small salon paper has settled; it does not tell anyone what a given holder wants to see.

About one salon approval in eight never reaches the borrower: cancellation after approval was at least 12.9% for FY2017 to FY2024, and 14.5% if undisbursed loans count as cancelled. Among 252 loans disbursed FY2017 to FY2021, at least 10.7% have been charged off to date. The within-five-years charge-off rate is held back by the data source: the Manhattan-centred cohort behind it is too thin, so no number appears for it here. Approvals ran from 81 in FY2017 to 31 in FY2021 and then rose to 107 in FY2025, worth $23.1 million.

What a salon study must test

Because the loans are small, a study should be proportionate but still honest about chair economics: how many stations the lease can carry, whether stylists rent chairs or work as employees, and how much of revenue walks out with a departing stylist. Rent per square foot in Manhattan and in the New Jersey suburbs differ so widely that the trade area has to be fixed before any revenue is modeled. Debt service coverage should assume a build-out period without income. Area counts depend on the project county falling inside the July 2023 delineation; a salon loan with an unplaceable county is absent from every New York count, which makes the figures here minimums.