Finance for hair and beauty salons

Let's start with the awkward bit. Many salons, barbers and beauty businesses trade as sole traders or partnerships, and Ask Sterling can't introduce them to finance. If your salon is a limited company, the rest of this page explains which finance fits a salon's takings and what it really costs.

Why limited companies only

Introducing a sole trader or a small partnership to finance is a regulated activity called credit broking, and it stays regulated even when the amount is large and for business purposes. Ask Sterling doesn't hold that permission, so it only works with limited companies. It isn't a judgement on sole-trader salons, which are often well run and profitable. If you are thinking of incorporating anyway, talk to your accountant. Funders will want to see trading history in the company's own name, so the clock starts when the company starts trading. More on this in why limited companies only.

The cash-flow shape of a salon

Takings come in by card, every day, and swing with the calendar: busy before Christmas, weddings and proms, quieter in January. Costs are mostly fixed: rent, wages, product stock and the card machine.

Two salon-specific factors shape the finances.

Staffing model. Employed stylists cost wages every week; the National Living Wage for those 21 and over has been £12.71 an hour since April 2026. Self-employed stylists renting chairs pay you a steady rent but keep their own takings. Funders read the two models differently, so be ready to explain yours.

VAT. Registration is required once taxable turnover for the last 12 months goes over £90,000. A salon that grows past that point adds VAT to its prices or takes the hit on margin, and that changes what it can afford to repay.

Which finance fits, and which doesn't

A merchant cash advance suits a card-heavy salon because it is collected as a percentage of card takings, so payments fall in a quiet week. Laser and aesthetics equipment is expensive and long-lived, so it belongs on asset finance.

What it costs: a worked example

Say the salon company takes £50,000 at a factor rate of 1.30 over about 6 months, collected weekly.

• You repay £65,000 in total.
• That is 26 weekly payments of £2,500.
• The cost is £15,000.
• As an APR, that is about 107%.

Sterling's rule of thumb puts over 100% APR in "very expensive" territory. On a refit that lifts prices or capacity for years, a loan at a lower rate over a longer term will usually leave more in the till. The calculator on this page does the conversion for any offer you receive.

What funders typically ask a salon for

• Bank statements for the last several months, and card merchant statements.
• Filed accounts at Companies House.
• VAT returns, if registered.
• Lease details for the premises.
• For equipment, a supplier quote.

A director's personal guarantee may be required, and a funder may run a credit search, which could be a soft search.

Red flags specific to salons

1. Chair rents counted as takings. If an offer is sized on gross card takings that belong to self-employed stylists, the repayments will be set on money that isn't the salon's.
2. Equipment finance from the supplier with no comparison. Aesthetics kit is often sold with finance attached. Convert it to an APR and compare before you sign.
3. Short money for a long refit. A 6-month advance for a refit expected to pay back over years puts the whole cost into the first half-year.

Business finance for limited companies is not regulated by the Financial Conduct Authority, and merchant cash advances are not loans and are not FCA-regulated.