SBA 7(a) Beauty Salon Feasibility Study in Georgia

Salons are 11 of 39 among Georgia's asset classes, while Georgia sits at 14 for 7(a) salon lending. The program approved 193 salon loans worth $44.3 million across FY2017 to FY2026. Georgia's distinguishing figure is the loan size: a $139,000 median stands 1.60x above the nationwide 7(a) salon median, and the middle half runs between $50,000 and $296,200. A brand flag sits on 21.8% of loans. In short, the median Georgia salon loan is 1.60x the nationwide salon median, and about one loan in five carries a brand flag.

The loss record

The FY2017 to FY2021 cohort holds 68 funded loans; no fewer than 11.8% are charged off now, and 8.8% were by year five. For approvals from FY2017 to FY2024, cancellation took 15.2% at least, and the wider count gives 15.2% again. Open loans can raise the charge-off floors further. A lender should treat the numbers as a caution about thin-margin service businesses, and a borrower should treat them as a reason to hold cash in reserve.

Lenders and counties

Newtek Bank, National Association heads the table with 17 loans and $3.2 million. Behind it come Wells Fargo Bank National Association (15 loans, $762,200) and Readycap Lending, LLC (12 loans, $678,400), plus an 11-loan tie between Stearns Bank National Association ($1.8 million) and Celtic Bank Corporation ($1.2 million). Several of these averages are tiny. The figures are SBA records of loans held. Fulton County has 45 loans, Cobb 29, Gwinnett 27 and DeKalb 20, and Columbia follows with 10. Volume reached 33 loans and $6.4 million in FY2024.

The study a Georgia salon needs

Chairs, stylists and loyal clients produce a salon's revenue, so the study should count the stations the space holds, say whether stylists are employees or renters, and plan for a top stylist walking out with clients. It should weigh occupancy cost against takings per chair in the specific suburb, count rival salons and suite rentals, and place the build-out budget next to a note likely to exceed the national median. With early losses this high, the payment should be tested against a slow fill and a first-year dip. With notes this small, the study should state plainly what could be recovered if a loan failed. SBA publishes program terms.