Funding for salons, barbers and beauty clinics
A salon's takings are steady, card-heavy and easy to read, which makes it one of the simplest businesses for us to fund. The difficulty owners hit is that the bank sees a small Ltd with no assets and a lease; we see twelve months of card settlements and a full appointment book.
What's different about funding a salon
Salons and barbershops have the most readable cash flow of any trade we fund. Takings are almost entirely by card, they repeat weekly, and the appointment book tells you next month's revenue before it happens. A salon taking £22,000 a month through Dojo or SumUp with a steady six-month history is, on our numbers, a lower risk than many businesses with twice the turnover.
The bank doesn't see it that way because the company has nothing to secure a loan against: the chairs, basins and mirrors are worth little second-hand, the lease belongs to the landlord, and the owner often started the Ltd two or three years ago. So the bank asks for a business plan and three years of accounts, and the salon owner, who has a full diary and a refit to do, gives up.
We fund from the card terminal. A merchant cash advance repaid as a small share of each day's takings is the usual fit for a refit, a product order or getting through January. For new chairs, backwash units, lasers and aesthetic equipment, equipment finance with the kit as security is often cheaper. For a second salon, expansion funding with a staged drawdown.
The salon cash-flow calendar
December is the best month in almost every salon in the country: party hair, colour, nails, gift vouchers. January is the worst, and it's also when the rent review, the insurance renewal and, for many, the VAT return all land. A salon that wants to refit does it in January because it's the only month it can close for a week; that's also the month it can least afford to.
That timing is why a cash advance suits the trade. Funds in January, close for the refit, reopen for Valentine's, repay as a percentage of card takings through the spring wedding and prom season when the diary is full. The remittances are smallest exactly when takings are, and largest in May and June when they can be.
Barbershops run flatter through the year with less of a December spike and no wedding season, but a sharper fortnightly rhythm around paydays. We size the holdback accordingly.
What we look at for salons and barbers
The four things our underwriters read first. None of them is a business plan.
A salon's takings should look like a heartbeat: steady, repeating, with December higher and January lower. That pattern is what we're underwriting.
If some takings go through self-employed stylists' own terminals, they aren't the company's card takings. We work from what settles to the Ltd's account, so tell us the split.
Treatwell, Fresha and Booksy deposits and prepayments arrive by bank transfer. They count towards bank turnover and show us demand, even though they bypass the terminal.
Salons that retail 15% or more of takings in product have a stock cost that moves with trade. A product order before Christmas is a classic short-term use of funding.
How it works
Four steps, with the timings we actually work to.
Apply online
Business name, what you do, roughly what goes through the till, the amount and what it's for. No credit search at this stage.
A specialist calls you back
Confirms it's a fit, tells you which product suits the numbers and what it would typically cost. If it isn't a fit, you hear that now.
Decision in writing
Send six months of bank statements (open banking takes under a minute), card statements if you take cards, and photo ID. The offer shows the amount, the total to repay and how it's collected.
Funds in your account
E-sign, and the money goes to the business account. Repayments start as agreed.
A worked example
| Monthly card takings (Dec) | £29,000 |
| Monthly card takings (Jan) | £17,000 |
| Advance | £18,000 |
| Factor rate | 1.25 |
| Total to repay | £22,500 |
| Cost of funding | £4,500 |
| Collected as | 12% of daily card takings |
| £650 card day in January | £78 remitted |
| £1,300 card day in May | £156 remitted |
| Cleared in about | 8 months at these takings |
Illustrative figures using typical market terms; not a real customer. Your offer depends on your trading and our assessment.
Eligibility
- A UK limited company or LLP that holds the lease and the card terminal
- Trading six months or more at the current site
- £10,000 a month or more through the card terminal in the company's name
- A UK business bank account
- A director who can provide photo ID and six months of bank and card statements
- Self-employed stylists and sole traders: funding to individuals is regulated consumer credit, which we don't offer. Incorporate and come back.
- Salons where most takings go through stylists' own terminals rather than the company's
- Businesses in administration or a CVA, or with an unresolved CCJ
Which product fits which salon problem
| Problem | Best fit | Why |
|---|---|---|
| Refit during the January closure | Merchant cash advance | Repays through the spring; tiny remittances while you're closed |
| Backwash units, chairs, dryers, a laser or HIFU machine | Equipment finance | The equipment is the security, so the rate is lower; 24 to 48 months |
| Second salon: deposit, fit-out, first product order | Expansion funding | Staged drawdown; repayments start when the second site opens |
| Buying out a business partner | Business loan | A fixed sum over 24 to 36 months with a predictable monthly cost |
| Christmas product order | Short-term finance | 3 months, cleared from December retail |
What salons & barbers use it for
Personal guarantees and your credit score
The director gives a personal guarantee, as with all unsecured business funding in the UK; there's no charge on your home. The enquiry runs no credit search. Salon owners often ask because they're planning a mortgage or have been through a difficult patch; the assessment is on the salon's card and bank statements, and any search at offer stage is done with your consent after we've told you.
A direct lender, in plain terms
Our own underwriters. Your file isn't sold on to a panel or passed around a market; the people who assess it are the people who fund it.
The total on your offer, nothing before funds are released. No application fee, no broker commission built into your price.
Finance to UK limited companies and LLPs for business purposes is not regulated consumer credit. The legal name of the funding entity is on every offer document.
Questions from salons & barbers
How much can a salon borrow?
Typically around one month of card takings, from £5,000 upwards. A salon taking £22,000 a month through the terminal would usually be looking at £15,000 to £28,000. Larger multi-chair salons and clinics with aesthetics income go higher.
I'm a self-employed stylist renting a chair. Can I apply?
Not as an individual: funding to sole traders is regulated consumer credit, which we don't offer. If you trade through a limited company with its own card terminal, yes.
Do booking-platform payments count?
Treatwell, Fresha and Booksy prepayments arrive by bank transfer, so they don't count as card takings for a cash advance, but they count towards bank turnover and they show us demand. Tell us the split and we'll size it properly.
Can I finance a laser or HIFU machine?
Yes, on equipment finance with the machine as the security, usually over 36 to 48 months, which is cheaper than a cash advance for a single large item. We'll quote both so you can compare.
I want to close for a week to refit. Does that matter?
No. The holdback is a percentage of card takings, so a week with no takings is a week with no remittances. The total you owe doesn't change.
Can I open a second salon with this?
Usually through expansion funding: the deposit and fit-out are drawn in stages, and the first salon's takings carry the repayments until the second is trading.
Does applying affect my credit score?
No. The enquiry runs no credit search. Any search at offer stage is with your consent, and we tell you first.
Do you fund barbershops?
Yes, on exactly the same basis. Barbers tend to run flatter through the year, so we size the holdback to the fortnightly payday rhythm rather than a seasonal one.
What documents do I need?
Six months of business bank statements (open banking, under a minute), six months of card terminal statements, and photo ID for a director. No accounts, no plan.
What if my salon is only eight months old?
Six months at the current site is the minimum. Eight is fine.
Other trades we fund
Products mentioned on this page
See what your business could be offered
Two minutes to tell us about the business. A funding specialist calls you back, usually the same working day, with a straight answer.