SBA 7(a) Beauty Salon Feasibility Study in Wisconsin

A shrinking file with a regional lender mix

Wisconsin beauty salons borrowed under 7(a) at a pace that has slowed. SBA approved 183 loans since FY2017, worth $36.8 million, but the yearly count slid from 28 loans in FY2018 and FY2019 to 9 in FY2025, with 13 in FY2026. A borrower entering now is joining a field where fewer peers have used the program lately. The state ranks 18 for number of loans, and salons place 7th among Wisconsin's 39 classes.

Size

The median of $113,300 is 1.30x the nationwide 7(a) median for salons, so a Wisconsin salon borrows more than its counterpart elsewhere. Loans in the middle range from $45,000 to $228,950. Franchised salons are 8.7% of loans. Those figures describe small businesses with several chairs, or an owner buying an existing salon and its equipment.

Lenders with a local flavour

Summit CU holds 18 loans, U.S. Bank, National Association 15 and Nicolet National Bank 14, while Wisconsin Women's Business Initiative Corporation and Associated Bank National Association have 12 each. That mix of a credit union, a community lender and regional banks is unusual in a cell like this. SBA records the present holder only, so the tallies are not a statement of any lender's practice. Dane and Waukesha counties each have 30 loans, Milwaukee 23, and La Crosse and Outagamie 9 each.

The loss floors

Cancellations came to 11.8% or more across approvals made FY2017 to FY2024, with no change when undisbursed loans join in. Of 105 loans that funded between FY2017 and FY2021, 4.8% carry a charge-off at present and 2.9% reached it inside five years. Taken as floors from open loans, they are mid-range, neither low nor severe.

What a Wisconsin salon study has to test

Starting points are the chair count, the pricing the local market supports and the stylists' commitment: employees, booth renters or the owner alone. A study should test the rebooking rate, the effect of seasonal weather on appointments and the rent per square foot in the chosen centre. Build-out for plumbing, ventilation and retail display has to be set beside a loan near the $113,300 median. Because the file has been shrinking, the study should explain why this project can hold its clients, and the repayment test should include a weak first year. The valuation will need booking records that can be checked.