Beauty Salon Feasibility Study in the Providence-Warwick, RI-MA Metro Area

Providence-Warwick salons borrow modestly. A median loan of $72,950 is 0.73x the national class median, with central loans running only from $46,250 to $177,750. The file counts 58 approvals between FY2017 and FY2026 for $7.8 million. The area is 36 of 546 for the class and hosts salons as 7 of 39 among its own classes, while a location quotient of 1.01x says its weight is essentially the national share.

A metro that crosses a state line

Providence County, RI leads with 21 loans, narrowly ahead of Bristol County, MA with 20, and Kent County, RI follows with 10. The metro straddles a state line, so licensing and tax rules differ for projects in Rhode Island and Massachusetts. Under 7(a) there are 49 loans and under 504 only 9. Franchise units are 8.6% of loans. Santander Bank, National Association shows 9 loans and $2.1 million, Bristol County Savings Bank 6 and $364,000, and TD Bank, National Association 5 and $424,500.

What the years show

FY2017 had 9 loans and $1.0 million, FY2019 8 loans and $1.7 million, FY2020 7 loans and $830,000, FY2022 5 loans and $1.2 million and FY2024 7 loans and $907,000. FY2018, FY2021, FY2023, FY2025 and FY2026 stay hidden. Cancelled approvals have a floor of 10.9% with or without the undisbursed loans. No charge-off rate appears since the cohort is under 30 loans, a limit of the data and no claim of zero losses.

Questions for a Providence-area salon

A salon is a stylist business, so the study should test the lead stylist's book of clients, chair rental versus employment, and what happens if a stylist leaves. Rent and build-out belong beside the $72,950 median; plumbing and ventilation can push a modest project over it. The trade area should be tested by foot traffic and by competing salons in the same corridor. Cover the loan payment through a slow ramp. A loan under this class often carries a short history, so a lender will look hard at the borrower's own record behind the chair. The area uses the July 2023 definitions. The study should also describe the service menu, the price points and the share of revenue expected from retail products, since these set revenue per chair and decide how much rent the space can carry beside a modest loan.