SBA 504 Beauty Salon Feasibility Study in California

Beauty salon loans in California: size and franchising

Counting FY2017 to FY2026, California shows 41 SBA 504 approvals for beauty salons, adding up to $21.7 million in gross dollars. A typical California approval is $432,000, while the middle half of beauty salons loans reaches from $266,000 to $630,000. In comparison with beauty salons nationally under SBA 504, California posts a ratio of 1.85x, so a typical California loan for beauty salons runs bigger than nationwide. Look first at 1.85x: it sets California beauty salons apart from both parent pages of California. The franchise share is 0.00%; owners of California beauty salons operate independently.

Among states, California ranks 3 for beauty salons under SBA 504; among the classes of California itself, beauty salons rank 20 of 39. FY2017 was the California high point, 6 loans and $4.1 million together, while FY2026 shows 3 loans and $2.1 million. California stands at rank 3 among states for 504 salon loans, with a median far over the national one, so this cell, not the blended class, shows an unusual program use.

At the head of the California holder list is The Mortgage Capital Development Corporation: 11 loans and $9.0 million. Further California holders include CDC Small Business Finance Corp., which holds 7 loans valued at $2.5 million, AMPAC Tri-State CDC, Inc., which holds 6 loans valued at $3.3 million and Business Finance Capital, which holds 5 loans valued at $2.0 million. The Mortgage Capital Development Corporation heads California's list in SBA's file on 41 loans: a record of beauty salons loans held, rating no lender. The California loans cluster in Los Angeles, which has 9; San Diego has 6 and Contra Costa has 4. Further counts include Santa Clara 3, Orange 2 and Sacramento 2.

Outcomes and data limits for California

Within California, FY2017 to FY2024 approvals report at least 12.1% were cancelled after approval, against a ceiling of 15.2% that adds loans never disbursed. No charge-off rate appears: funded loans in California are too few, and a California blank is not a clean bill. SBA-outside loans never appear in California's file.

What a California salon study must show

A 504 loan for a salon means the operator is buying or building the space, so the study should explain why ownership beats leasing near Los Angeles. Show where the stylists come from before the clients, because revenue follows chairs filled. Compensation, commission or booth rental, changes both revenue and expense. Plumbing, ventilation and stations dominate use of funds, and finish work adds little for the next occupant. Test payments on a loan near $432,000 at realistic chair occupancy.