SBA 7(a) Beauty Salon Feasibility Study in New York

Small tickets with a $50,000 median

New York beauty salons under 7(a) borrow small sums. The median is $50,000, 0.57x the national 7(a) median for salons, and half of all loans lie between $25,000 and $144,000. The cell holds 590 approvals from FY2017 to FY2026, worth $89.4 million, which makes the state third among states for the class, with beauty salons placing 4 of 39 among New York asset classes.

Cancellations and charge-offs

New York salons saw cancellation of no less than 11.2% across FY2017 to FY2024 approvals, or 13.0% once undisbursed loans are included. For the FY2017 to FY2021 disbursed cohort of 235 loans, 11.9% are charged off to date and 7.7% were charged off within five years. Both are floors. Losses of that size mean a small loan is not automatically a safe loan, for a lender or for a borrower.

Franchise share, lenders and places

Franchised salons are 5.1% of loans, which leaves the independent as the norm. TD Bank, National Association appears with 139 loans, Manufacturers and Traders Trust Company with 105, JPMorgan Chase Bank, National Association with 55, KeyBank National Association with 25 and ESL FCU with 22. In each case the name is whoever SBA now shows as holder; none of this is a verdict on a lender. New York County has 106 loans, Kings 61, Nassau 46, with Erie, Monroe and Queens at 43 each. Volume ran from 27 loans in FY2021 up to 103 loans in FY2025, when dollars were $17.4 million.

What a New York salon study has to test

With such small loans, the study's weight falls on whether the owner can cover the lease, since rent is a fixed cost that comes due before revenue does. It should count stylist chairs, price lists, rebooking rates and the sensitivity of revenue to losing a single senior stylist. Opening capital should be shown separately from the loan, including the months of rent paid before the first client; a small cushion leaves little room for a slow start. The ask should be compared with the median of $50,000, with a reason for anything materially higher. The repayment test should assume a slow first year, with a valuation resting on bookings that can be documented.