SBA 7(a) Beauty Salon Feasibility Study in Colorado

Colorado salons borrow far more than salons elsewhere

Loan size is what marks Colorado out. Beauty salons in the state borrowed a median of $150,000 under 7(a), which is 1.72x the program's median for salons in the rest of the country, while the central band of loans runs from $49,400 to $341,250. The span from FY2017 to FY2026 shows 218 loans worth $66.3 million. Colorado stands twelfth among states on count, and salons hold eighth place on Colorado's list of 39 classes. Franchising reaches 15.1%, higher than one would expect for a personal-service trade, so a fair number of these salons carry a brand.

A surge in recent years

Approvals have changed shape. They ran between 9 and 19 a year from FY2017 to FY2022, with the low point of 9 in FY2020, then jumped to 32 in FY2023, 31 in FY2024 and 44 in FY2025, before easing to 29 in FY2026. Nearly all the recent loans are therefore young, and a lender comparing a present request with the file is mostly comparing it with loans that have not yet had time to succeed or fail.

Cancellations and losses

Cancelled approvals start at 13.1% for FY2017 to FY2024 and reach 16.6% if undisbursed loans are written off as cancelled, a large spread. Of the 63 loans disbursed in that window, 7.9% stand charged off today and 3.2% were lost inside the first five years. The cohort is small and these are minimums, so they should be read as a warning rather than a measured rate, but they point to losses well above those seen for some professional classes.

Lenders and counties

U.S. Bank, National Association is the top lender in the table with 35 loans and $2.8 million, with The Huntington National Bank in second place at 20 loans and $4.8 million, Wells Fargo Bank National Association on 18 and $4.1 million, and Newtek Bank, National Association and Readycap Lending, LLC with 10 loans each, worth $4.2 million and $810,500. The columns show portfolios and say nothing about any lender's requirements. Denver County has 49 loans, Jefferson 34, Arapahoe 28, Boulder 23, Douglas 20 and El Paso 19, with Adams, Larimer, Broomfield and Weld trailing.

Testing a Colorado salon

The study should begin by distinguishing the models: a suite or booth rental salon, an employee-based salon and a franchised brand differ in revenue, payroll and risk. It should count the stylists available, the client book each brings, the nearby competition and the rents for the space. With a median of $150,000 and a central half reaching $341,250, the budget for plumbing, chairs, retail stock and working capital should be itemised. Product sales and the cost of a brand's fees belong in the model for a franchised unit. Repayment must survive slow first-year bookings, given the losses above, and the lease must outlast the loan.