SBA 7(a) Beauty Salon Feasibility Study in Indiana

The smallest tickets in this group

Beauty salons in Indiana borrow little under SBA 7(a): the median loan is $78,000, 0.90x the national figure, with loans from $34,800 to $211,000 spanning the central half. The program approved 197 loans between FY2017 and FY2026, worth $40.5 million in gross dollars. Indiana ranks 13th among states by count, and beauty salons are sixth of 39 in the state's own classes. Franchise units account for 13.2% of loans.

Outcomes

Indiana salon approvals through FY2024 were cancelled at 8.0% or more, rising to 10.4% when loans never disbursed are counted. The distance between those two points to approved plans that did not close. Of the 85 loans funded by FY2021, 3.5% are charged off to date, while the measure for the first five years prints as 0.00%. Neither is final while loans remain open, and a lender should keep that in view.

Banks behind the chairs

The Huntington National Bank is first with 32 loans worth $2.7 million. Centier Bank holds 16 worth $1.7 million, Old National Bank has 10 at $2.9 million, and First Merchants Bank has 6 worth $1.2 million. Every amount is small, which fits a class with so low a median. SBA reports present holders, not lending standards. Marion County has 37 loans, Hamilton 31, St Joseph 22 and Lake 13. Approvals reached 29 in FY2024 and were 16 in FY2026.

What an Indiana salon study must test

At these loan sizes, most borrowers are buying an existing salon, fitting out a leased suite, or buying chairs and equipment, so the study should say which. It should test chair count and the stylists who will rent or work the chairs, because a salon's revenue depends on the people in it and on the clients who follow them. The study should check the client base within a short drive, competing salons, pricing, rent per chair, and how much revenue walks out if a key stylist leaves. For a purchase, it should compare the price with documented sales and the transfer of the client list. Show payment coverage with a slow first year. The appraisal will rest on earnings that are usually modest.