SBA 7(a) Beauty Salon Feasibility Study in Tennessee

Salon lending larger than the national habit

Tennessee beauty salons borrow more than their counterparts elsewhere. A $150,000 median, 1.72x the figure for salons nationally, anchors the Tennessee record, and the 87 loans have an inner half between $50,000 and $350,000. The file totals $25.7 million for FY2017 to FY2026. Beauty salon is eighth of 39 classes in Tennessee and the state is 26th by count. Franchise brands account for 24.1% of loans, a meaningful minority in a trade usually thought of as owner-operated.

Davidson County and its neighbors

Davidson County has 26 loans, Shelby 14, Knox 12 and Williamson 11, with Montgomery at 6, Hamilton at 5 and Rutherford at 3. Williamson County, a suburb, outranks several larger counties, which suggests that salon financing follows affluent suburban demand rather than population alone. Among holders, 8 loans each sit with Readycap Lending, LLC ($1.0 million) and U.S. Bank, National Association ($544,900), 7 each with The Huntington National Bank ($3.0 million) and Northeast Bank ($862,200), and 5 with Newtek Bank, National Association ($1.1 million). Huntington's average ticket is well above the rest. These are SBA's present-holder records.

What the outcome record can and cannot say

Cancellation after approval is floored at 6.7%, rising to 8.3% when loans never disbursed are counted. Too few Tennessee salon loans funded early for a charge-off rate to be published, so this page prints none and reads nothing into the omission. A lender or borrower should not read that gap as a clean record. Approvals have recovered: 9 loans and $2.3 million in FY2017, 6 and $3.0 million in FY2021, and 16 loans and $8.5 million in FY2026, the strongest year in the series.

Testing a Tennessee salon plan

A salon is a business of chairs and stylists, so a feasibility study should model chair capacity and the revenue each chair produces, the rent in the planned location, and how many stylists the salon must keep to cover its fixed costs. It should assess competing salons and suites in the trade area, the likely clientele, and the share of revenue that depends on booth renters or commission staff. Chairs, fixtures and fit-out belong in a budget reconciled to a $150,000 loan, with the payment covered under a cautious first-year booking case. Since 24.1% of the file is franchised, the study should state whether the plan is a brand or an independent. The appraisal will give limited weight to equipment, so a lender will look closely at the lease and at the owner's own experience.