SBA 7(a) Beauty Salon Feasibility Study in North Dakota

North Dakota salons borrow more than salons elsewhere

In North Dakota the median salon loan under 7(a) is $150,500, which is 1.73x the nationwide figure, and the middle half runs from $80,500 to $260,000. The record holds 32 approvals worth $7.0 million. Franchising is only 3.1%. Beauty salons stand at 4 of 39 among North Dakota's classes, a high local standing, even though the state is 42 among states by count, which says the state is small but salons are a staple of its small business lending. No second metric clears our margin; the ratio is the cell's distinctive sign.

Cass and Burleigh

Cass County has 18 loans and Burleigh 10, so two metros hold nearly the whole class, with single loans in Barnes, Morton, Stark and Williams. First Western Bank & Trust appears alone in the lender table, with 11 loans and $3.2 million, as the holder SBA now records. Approvals were 7 loans and $629,900 in FY2017, none in FY2019, 6 loans and $2.3 million in FY2021, and 5 loans and $1.9 million in FY2026.

For Dakota salons, Salons in North Dakota come with no published cancellation share and no published loss share; the loans are too sparse. The blanks are not a claim about performance.

A study for a North Dakota salon

Salons depend on stylists, so the study should start with chair or suite count and the way stylists are paid, whether as employees or as renters of a chair, and test the retention of the stylists the owner counts on. Where population is thin the trade area may be one small city, so the study should count competing salons and compare them with the number of residents they serve. Winter weather affects appointments, and the model should show the effect by month. A loan above the national median may include a building purchase or a larger buildout, and the study should say so and test cost against the appraisal. Retail product sales and extra services can lift income, but the study should treat them cautiously. Show coverage when the first year runs short of the plan, and show what the owner's pay must be.

At a median of $150,500, many North Dakota salon loans go beyond chairs and supplies. The study should say whether the borrower is buying a building, and if so show what share of it the salon uses and how any extra space earns rent, because a landlord and operator carry two kinds of risk.