SBA 7(a) Beauty Salon Feasibility Study in Delaware

Micro-loans in a small state

Beauty salons in Delaware borrow very small amounts. The median loan is $50,000, only 0.57x the nationwide mark, with the middle half running from $20,450 to $168,675. SBA approved 34 loans between FY2017 and FY2026 for a total of $3.4 million, ranking Delaware 39 among states, while salons hold 5 of 39 places among Delaware's asset classes. That is a big part of local lending for a tiny dollar volume. Franchise affiliation is 2.9% of loans.

Counties and the holder of record

New Castle County has 17 loans, Sussex 9 and Kent 8, so Manufacturers and Traders Trust Company holds 19 loans worth $1.6 million, the only lender listed and by far the largest holder. SBA's data show who holds the loans today, which is no indication of the bank's practice. A salon owner in Delaware will find that one bank dominates the record, and a study should probably be shown to more than one lender.

An irregular calendar and withheld rates

FY2017 shows 1 loan of $450,000, which is far above the median. FY2020 and FY2021 each show 0 loans and $0. Then volume returns: 5 loans in FY2022, 4 in FY2024 with $319,700, 8 loans in FY2025 with $981,800, and 6 loans and $708,300 in FY2026. No cancellation or loss percentage is given for Delaware salons; SBA's cohort is too small, and silence there is not a zero.

Delaware salons: what the file must show

For a salon the study has to be concrete about people. It should show the number of chairs and stylists, how they are paid, whether they rent chairs or work as employees, and the client base each can build. Location matters: walk-by traffic, parking, neighbours and rent per square foot. Services, retail products and average ticket should build the revenue line, and the schedule should reflect appointment patterns across the week. Equipment, plumbing and build-out are the main capital costs, and with loans this small the study can be short but must be exact. Lenders will look for the owner's own experience and a conservative first year, in which the payment is still covered after a slow start. Because Delaware has so few counties, the competing salons are easy to name, and a file that lists them by address and service level will persuade a lender faster than a general market summary.