Don’t hamper the chances of your salon making it by buying into the myth that a business loan is going to take better care of you than a capital advance. For any small business, especially a salon, it’s crucial to have some capital to work with, as you’re vulnerable to unexpected price hikes in products, fluxes in client traffic, and a number of unforeseen costs.
However, the salon industry is also considered a low-barrier of entry industry, which means you’ll be able secure the funds you need through a capital advance. Those wanting to pursue higher-margin services will need straighteners, curlers, and professional hair products in addition to the basic necessities of hair styling chairs, a shampooing center, cutting equipment and hairdryers. All in all, the average capital investment for a salon is about $45,000.
For a variety of reasons, a capital advance will allow your salon to weather the worst of the storms you will face and come out the other side with your hair in place like it was hit with a heavy blast of TRESemmé Extra Hold Hairspray.
Here are 5 reasons why a capital advance is better than a salon loan:
Capital Advances Run Hot on Approval Rates
In the banking world, a salon is considered a “high risk” investment, or in other words, not something banks are especially interested in taking on board. This is due to the fact that a salon is often a function of you, the owner, instead of being tied up in capital—expensive machines and infrastructure. On top of this, income is often inconsistent, which puts you at risk of missing salon loan payments when dealing with a fixed payment schedule (also not something a bank is going to be excited about).
Unlike salon loans, these unique factors will not be detrimental to your ability to cash in on capital through a capital advance. There are numerous businesses out there, such as Wellen Capital, who understand your needs as an entrepreneur and salon owner. Through non traditional lenders, it’s possible to secure your capital advance.
Get Your Money Fast
A capital advance is without a doubt a faster and easier way to secure the money you need to launch your salon or expand your business interests. Often, it’s possible to get cash in less than a week through a capital advance.
No Use Restrictions
There are no spending restrictions with a capital advance. The importance of this cannot be overstated, especially for first-time salon business owners.
It can be difficult to anticipate all the expenses and financial hiccups that might come along as you settle into your new salon, which can become a problem if you are trying to use money from a traditional salon loan to fix these issues. This is because, when you are securing one of these salon loans, you are required to explain exactly what the loan money was being spent on—and that’s what the money has to be used for.
However, with a capital advance, you don’t have to justify every dollar spent. There are no restrictions on how you spend your money, allowing you to act in real time and make the best possible decisions about your finances given the obstacles in front of you.
Pay It Back As You Can
Things can be particularly difficult for salon owners in the beginning of setting out on their entrepreneurial journey. Money will be tight as you work to establish your brand and base clientele, who will eventually cover overheads and carry you through lean months.
By securing a capital advance, you won’t be put in a position where a tough month leaves you unable to make your fixed salon loan payment. This is because repayment is targeted to be a percentage of your sales. As sales fluctuate, so can your daily payment.
No Collateral Required
With a capital advance, you won’t have to risk it all in your attempt to develop a thriving salon business. You won’t be required to put up assets, such as your home, as collateral for the bank.
Wellen Capital offers great alternative working capital options for women entrepreneurs—as well as men—who are ready to jump in and get started.
To find out more, contact a Funding Specialist at 888-963-6130 or apply for a cash advance now.