Beauty Salon Feasibility Study in Utah

Utah salons borrow bigger

Utah's beauty salons do not borrow more often than salons elsewhere, but they borrow more each time. The state's 153 SBA salon approvals between FY2017 and FY2026, worth $45.1 million, put it 21 of 54 among states, and a location quotient of 0.91x leaves the trade slightly under its national weight in Utah's SBA book. The median loan, though, is $150,000, which is 1.50x the national salon median, and it is the one distinctive measure, against both the national salon figure and Utah's median across all classes. By loan count, salons place 8 of 39 within the state.

504 money and local lenders

Part of the difference is program. SBA 504, which finances the building rather than the chairs, carried 24 Utah salon loans, and Mountain West Small Business Finance accounts for 20 of them, worth $7.7 million; 7(a) carried the other 129. Zions Bancorporation, National Association is the busiest 7(a) holder with 21 loans, Mountain America FCU has 18 and Central Bank 12, the last worth $3.9 million. Half of Utah's salon approvals sit between $60,000 and $296,000. Franchise concepts take 20.9% of loans, so brand systems are a visible part of the market. Salt Lake County leads with 62 approvals and Utah County follows with 37. FY2018 and FY2025 were the busiest years at 22 approvals each, while the 13 loans of FY2022 carried $8.1 million, the largest dollar year.

How Utah salon loans have fared

At least 11.1% of Utah salon loans approved in the FY2017 to FY2024 window were cancelled, the ceiling also 11.1%. Charge-offs to date reach 5.9% of the 68 salon loans that funded from FY2017 through FY2021, yet only 1.5% inside the first five years.

A bigger salon loan changes what the study must show. If the borrower is buying or building space through 504, the study has to test whether the location's clients can carry occupancy costs a tenant would not bear, and the appraisal will hinge on how easily the building could be re-let to another user. If the loan is 7(a) for a larger build-out, cost needs a line-by-line check against the $150,000 median and the $296,000 top of the middle half. Either way, demand comes down to stylists and their clients: the study should show where the chairs will be filled from, test debt service against realistic chair rental or commission splits, and allow for the slow early months while a client book forms.

The lender figures name the current holder of each loan as SBA reports it. All rates are approval-cohort floors that can still rise while loans remain open.