Beauty Salon Feasibility Study in Washington

A national-norm ticket, centred on King County

In size, Washington's salon loans look like the class nationally: the median of $103,100 is 1.03x the national median, and the cell passes none of our distinctness tests, each of which asks typical loan size, cancellations or charge-offs in Washington to sit apart from both Washington's all-asset record and salons countrywide. What stands out is geography and the timing of losses. King County alone holds 76 of the 208 Washington salon approvals made from FY2017 to FY2026, with Pierce at 36 and Snohomish at 27. Washington ranks 15 of 54 states for salon loans, the class stands 11 of 39 among Washington classes, and its location quotient of 0.88x leaves salons a little under their national weight among Washington SBA loans. Gross approvals reached $40.5 million.

Counts have risen, from 18 loans in FY2017 to 28 in FY2024, 26 in FY2025 and 25 in FY2026, though the FY2024 loans carried only $3.6 million, against $7.0 million on 20 loans in FY2022. The middle half of Washington salon loans runs from $30,000 to $278,125. SBA 7(a) carried 193 and SBA 504 carried 15, and franchised salons account for 11.1%. Lending is shared among several banks. U.S. Bank, National Association holds 30 loans worth $4.1 million, Columbia Bank 28 worth $1.4 million, KeyBank National Association 20 and Banner Bank 10. Enterprise Bank & Trust holds only 8, but they total $4.7 million, more than any other lender listed, so it is the name behind the larger salon deals here.

Late charge-offs in Washington salons

Washington cancelled at least 10.2% of its FY2017 to FY2024 salon approvals, and because none of those loans remains undisbursed the ceiling is the same 10.2%. The loss pattern is the lesson. Of 81 Washington salon loans disbursed in FY2017 to FY2021, 4.9% show as charged off so far, yet just 1.2% failed inside their first five years, leaving much of the Washington loss record after year five. Each rate is a floor.

Testing a Washington salon project

A study for a Washington salon should begin where the loans are, measuring demand and competing salons and suites at the neighbourhood level in a King, Pierce or Snohomish trade area, and should be more cautious in places such as Spokane or Yakima where far fewer loans were made. Cost testing covers the build-out, station plumbing, ventilation and the lease commitment. Debt service coverage has to hold across the whole term, not only the opening years, since the late losses suggest a salon can lose stylists, clients or its lease long after it opens. On appraisal, a leased salon offers little real estate, so the lender will weigh the going concern and the owner's equity, and a request near $278,125 needs that support spelled out more fully than one at the $103,100 median.