Beauty Salon Feasibility Study in Tennessee

Tennessee salons borrow more than the national class

Salon owners in Tennessee take on larger loans than salon owners across the country. The median of 90 SBA approvals from FY2017 to FY2026 was $156,350, which is 1.56x the salon median nationwide; Tennessee's middle half ran from $50,000 to $350,000. Gross approvals total $26.6 million, Tennessee ranks 27 of 54 among states for salon loans, salons stand 8 of 39 among Tennessee classes, and a 0.99x location quotient puts them at almost exactly their national weight.

Nearly the whole book is SBA 7(a): 87 loans, against 3 under SBA 504. Franchise concepts account for 23.3% of loans, so a branded concept needs a brand-cost check. Holders are spread thinly. Readycap Lending, LLC and U.S. Bank, National Association hold 8 loans each, The Huntington National Bank and Northeast Bank 7 each, and Newtek Bank, National Association 5; Huntington's 7 loans are worth $3.0 million while U.S. Bank's 8 come to $544,900, so their loans differ widely in size. Volume is uneven: 2 loans in FY2020, then 19 in FY2024 and 17 in FY2026 worth $8.9 million.

Cancellations, and a charge-off rate we withhold

Tennessee's FY2017 to FY2024 salon approvals carry a 6.5% cancellation floor, and an 8.1% ceiling if undisbursed loans are counted. That is a reasonably clean path from approval to funding. The charge-off rate is a different matter: its cohort of disbursed loans holds fewer than 30, so Loan Analytics withholds it entirely. A lender should not read that silence as an absence of losses; it means the Tennessee salon record is too thin to measure credit outcomes with any confidence.

What a Tennessee salon study has to establish

Because the record cannot speak to defaults, the study has to carry more of the credit case itself. Demand should be measured where the lending has happened: Davidson County holds 27 approvals, Shelby 14, Knox 12 and Williamson 11. The study should test how many stylists the site can attract and keep, the price point the local client base will pay, and the competing salons within reach. Cost estimates should cover build-out, stations and any franchise requirements at current quotes. With a median above the class nationally, debt service coverage must be shown at the actual loan, and if the deal includes property, the appraisal has to support it apart from the business. These figures cover SBA loans only; conventional salon financing is not in them.