Beauty Salon Feasibility Study in the Sacramento-Roseville-Folsom, CA Metro Area

Small shops, bigger than the national median

Beauty salons in the Sacramento-Roseville-Folsom area drew 48 loans worth $13.0 million over FY2017 to FY2026. Salons rank 13 of 39 within the Sacramento tally while the metro lands 41 of 546 for the class; the location quotient is 0.64x, and franchises are 20.8% of loans. The $150,000 median loan runs to 1.50x the nation's, so while salons are a thin part of local lending, Sacramento salon borrowers take larger loans than their national peers.

Lenders and county

The middle half runs from $48,925 to $279,225. The split by program is withheld. U.S. Bank, National Association holds 9 7(a) loans worth $1.0 million, Wells Fargo Bank National Association 7 worth $524,000, and Stearns Bank National Association 6 worth $1.0 million. These are SBA holder records. Sacramento County supplies 31 of the loans. The lender list is led by large national banks, each with only a few loans of modest size, and the dollar totals are small beside the loan counts. That fits a class of owner-operated shops where a typical request would pay for chairs, fixtures and operating cash more than for a building, though the data here do not break the use of proceeds out.

Years that clear the threshold: 5 loans in FY2018 ($915,800), 5 in FY2019 ($631,500), 5 in FY2020 ($2.1 million), 5 in FY2021 ($2.1 million), 7 in FY2023 ($3.9 million) and 5 in FY2024 ($1.4 million). FY2017, FY2022, FY2025 and FY2026 are withheld. The two outcome rates are likewise absent, so nothing is said about either, and a missing rate is not zero. Counties on the 2023 area list place the loans.

What a salon study has to prove

A salon plan should show the number of chairs or suites and how stylists will be paid or lease space, the site's customer base and visibility, and what the build-out will cost. Given a middle loan of $150,000, the study ought to say whether the project is a new shop, a relocation or an acquisition, and what supports any price paid for goodwill. Debt service coverage must hold while a new location builds its client list, and the study should show how the owner's own labor is treated in cash flow. Lenders will compare the plan with an appraisal. Nothing printed here forecasts a decision.