SBA 7(a) Beauty Salon Feasibility Study in Idaho

Small tickets, local lenders

Beauty salons are among the smallest loans in this program, and Idaho's are smaller than the national run. Salons in Idaho drew 60 approvals under 7(a) across the ten fiscal years, adding up to $10.3 million. A median of $68,800 puts the typical salon at 0.79x the nationwide figure, and the middle band of salon loans spans $25,000 and $204,375. Franchising reaches 18.3% of loans. Idaho ranks 32 among states by count for salon loans, and salons place 9 of 39 among Idaho's asset classes, a standing that shows how common the trade is in the state even though it ranks low nationally. No metric is recorded as clearing our distinctness margin, so the story of this cell is its scale and its mix of holders.

Who holds the loans

Zions Bancorporation, National Association shows 13 loans with $1.0 million in total, U.S. Bank, National Association has 8 loans with $409,600, and Idaho Central CU is recorded with 6 loans worth $2.4 million, a larger sum on fewer loans. These figures record the institutions that hold or held the loans in SBA's data and are not a judgement of any lender's practice. Ada County dominates with 29 loans, while Canyon and Kootenai each have 6, Bonneville 4, and Bannock and Twin Falls 3. Approvals ran at 6 loans and $669,000 in FY2017, dipped to 2 loans and $855,000 in FY2021, then climbed to 11 loans and $3.1 million in FY2024.

Among salon approvals made between FY2017 and FY2024, at least 11.6% never went forward, and adding the undisbursed loans changes nothing: floor and ceiling coincide at 11.6%. No charge-off rate is shown for this cell, since too few of its early loans had funded. We print no figure for it and do not call it zero.

What the study has to prove

For a salon the loan is often a build-out or an acquisition, and the study has to say which. Chair or suite count, stylist retention and the mix between employees and booth renters decide the income a lender can lean on, so the forecast should be built from capacity and realistic utilisation rather than from a revenue number alone. Competing salons within the trade area, how long the lease runs compared with the payback on the improvements, and the owner's own experience all belong in the analysis. Because tickets are small, the cost of a study must stay in proportion to the loan, so a focused report that tests demand, buildout cost and debt service coverage is more useful than a broad one. Sensitivity should show how coverage holds if the first year opens at lower utilisation. The appraisal for a leased salon rests on the business more than on real estate, and the study should say so plainly.