SBA 7(a) Beauty Salon Feasibility Study in Missouri

The highest charge-off floor in the page set

Beauty salons financed through SBA 7(a) in Missouri carry a charge-off floor of 12.0% among the 50 loans in the early Missouri salon cohort, with 6.0% charged off within five years of approval. Those are floors, so the final rates can only be higher, and they, more than loan size, mark the difference between this cell and its parents. The loans themselves are small: the median is $128,600, 1.48x the 7(a) typical for salons nationally, and the middle half runs from $30,000 to $241,800. Across 110 loans, the state total is $19.2 million.

Missouri ranks 23 among states for the program's salon loans by count, and beauty salons stand 9 of 39 within the state. Franchise ties cover 14.5% of loans, so most salons are independent, though chains and booth-rental brands are present. Saint Louis County has 31 loans, Jackson County 16, Boone 10, Saint Louis City 9, Greene 8, and Franklin and Saint Charles 5 each.

Lenders

The list of named holders is short. U.S. Bank, National Association holds 20 loans worth $875,300. The Central Trust Bank holds 7 worth $635,400, and Midwest Regional Bank holds 6 worth $1.8 million, a heavier average loan. SBA names the current holder of each loan and does not say how any holder underwrites.

Approvals were 14 in FY2017, dipped to 7 in FY2020, peaked at 17 in FY2023, and stood at 9 in FY2025 and FY2026, the latter with $3.7 million, the largest annual total in the series. Cancellation after approval had a floor of 9.8% for loans approved through FY2024, the same as the ceiling.

What a Missouri salon study must test

A salon is a labor business, so the study should start with the stylists: how many chairs the space holds, whether the owner works the floor, how staff are paid and what happens to revenue if a senior stylist leaves with clients. Then it should test the location against foot traffic and the competing salons nearby, and the pricing against local incomes. Because loan sizes are small and charge-offs were high in the early years, a lender should expect the study to show cash flow after the owner's own draw, with room for a slow opening. Leasehold improvements cannot be recovered if the business fails, and furniture has little resale value, so the plan should say what supports repayment besides the equipment.