SBA 7(a) Beauty Salon Feasibility Study in Arkansas

The smallest loans, the highest cancellation

Arkansas beauty salons borrow tiny amounts and often cancel. The 42 loans total only $8.3 million. The midpoint is $58,150, 0.67x the national 7(a) salon midpoint, and the middle half runs from $21,750 to $223,850. Cancellation among approvals dated through FY2024 is at least 23.7%, with the ceiling the same, so roughly one in four approved salon loans never funded. Franchised loans are 9.5%. Arkansas ranks 38 against other states in count, while beauty salon is 8 of 39 in the state's mix.

Holders and years

U.S. Bank, National Association holds 10 loans, but only $253,400 in all, an average ticket of a few tens of thousands. Arvest Bank holds 9 loans and $740,000. These are SBA's present holders. In the counties, Pulaski leads at 9, Benton and Faulkner follow at 6 apiece, and Washington stands at 5. The calendar is erratic: FY2023 brought 11 loans, FY2020 brought 8 and $3.5 million, while FY2017 had 2 loans for $35,200 and FY2025 had 2 for $15,000, so some years are only a handful of tiny loans.

Withheld losses

Salon losses cannot be shown: the cohort of funded loans fell under SBA's minimum, so we print nothing in the rate's place. With loans this small, even a few failures would swing a rate, which is why a minimum exists. Treat any rate here as a floor. The class has no coding limit.

What an Arkansas salon study has to show

A salon is a people business, so the study must show who the stylists are, whether they bring a client following, and whether they rent chairs or work as employees. Demand is measured by the households in the draw area, competing salons and the price of services. Because requests are small, the study can be compact, but it must still itemise chairs, stations, plumbing and retail inventory, and show the lease term. Cancellation is high in this class, so the study should document the steps still open, such as the lease signature or an equipment quote. Test the payment against losing a senior stylist, who may carry clients away. If the owner buys an existing salon, the seller's receipts should back the price in the study.