SBA 7(a) Beauty Salon Feasibility Study in Oregon

Oregon salons: micro loans and a high charge-off floor

Beauty salons in Oregon borrow in amounts that most lenders would call micro: the median 7(a) loan is $42,500, which is only 0.49x what salon owners elsewhere borrow, with the middle half of loans spanning $25,000 to $136,500. SBA's file counts 100 loans for FY2017 to FY2026, worth $14.0 million in gross dollars. Oregon ranks 24 on count for the class, and salons hold 9 of 39 among Oregon's financed industries. Franchise brands appear on 12.0% of loans. Two measures set this cell apart from Oregon overall and the class nationally: the median, and the charge-off floor, which is the more unusual of the two.

Charge-offs worth reading closely

Salon loans funded in FY2017 to FY2021 number 32 in the seasoned cohort, and the charge-off floor reads 18.8% to date against 9.4% on the five-year view. The gap between the two measures shows that losses kept arriving after the fifth year. Cancellation after approval was at least 13.2% for Oregon salon loans of FY2017 to FY2024, and the ceiling is likewise 13.2%. A cohort of 32 is small, so a handful of loans moves the percentages, and open loans can still add to the floor.

Holders and the Portland ring

Columbia Bank holds 32 loans, the largest group, ahead of U.S. Bank, National Association with 21. Northeast Bank and Washington Trust Bank trail with 5 apiece. They are SBA's holders today, not a ranking of quality. Multnomah County has 21 loans, Washington 15, Clackamas 13 and Lane 10, with Marion at 6 and Deschutes, Lincoln and Yamhill at 5 each. Annual counts rose to 16 in FY2024 and 24 in FY2025, though FY2025 dollars were only $1.9 million.

What an Oregon salon study has to test

The central problem in this trade is that sales depend on a few stylists with their own clients. A study has to show how booths or chairs are filled, whether stylists rent space or work as employees, and what happens to revenue if the best of them leave. Traffic and neighborhood income should be set against the number of competing salons nearby. Because the early charge-offs on record are so heavy, a lender should expect the plan to show a reserve of working capital and a payment that is covered at lower chair utilization than the owner hopes for. The loans are small, so the build-out should be restrained; leasehold improvements carry little value if the business closes. SBA's coding for salons in Oregon draws no recorded caveat.