Merchant account loans for Salons, Spas and wellness centers

Beauty is big business today; the global market has grown exponentially in the past few years. Today there are over 121K spas across the globe and much more coming up. If you are the proud owner of a salon, spa, makeup studio, barber shop, nail salon or even a large beauty center you most probably are on your feet all the time. It is not easy in the present competitive scenario to please customers and retain them unless you offer them the best facilities and exceptional customer care. This requires additional financing to maintain the business and keep it par with the latest trends in the market.

Extra financing can be used for various purposes like the expansion of the current business, renovation, repairs, purchase of equipment, property, consolidating a debt, working capital for the salon and several other major and minor expenses. If you have no bad credit history getting finance the traditional way by availing bank loans really is easy; but if on the contrary, you are dealing with debts and low credit scores, multiple NSF’s getting the right finance will be a challenge.

Bad Credit OK

Both small businesses and business conglomerates are not immune to bad credit; it happens to everyone more than people actually realize. The changing economic conditions, new rules, and regulations and the greater number of options available to customers have given rise to merchants with bad credit and bankruptcy liens. Burdened with a bad credit you will not be able to avail traditional bank loans.

Thankfully there are several alternative lending solutions from where you can borrow commercial loans with no collateral; these unsecured business loans have a very high-interest rate though. But the advantage is that merchants with bad credit can avail them. In fact, even those with bankruptcy liens can hope to receive aid from these lenders.

Usually, these loans are under $500,000. The simplified application procedure, the absence of processing fees and the immediate release of funds make this an attractive bank loan alternative for those riddled with bad debts.

What are your options?

Identifying lenders and funders who are willing to release funds for your business can be a daunting task. When traditional bank loans are not available the other two reasonable options are:

  1. Microlenders

    : Loans in the range of $5000 to $25000 can be availed from these non-bank lenders who are open to even those with poor credit scores. You must do your research to identify the best lender with reasonable interest rates.

  2. Merchant cash advance

    : The merchant cash advance is a far more popular alternative. In this case, the provider loans you a lump sum money in advance to get a percentage of the future sales conducted using credit cards; credit card factoring also works on the same concept incidentally. Unlike traditional bank loans where you repay every month, here the payments are daily or weekly. These business cash advance providers are very popular with all kinds of businesses even high-risk businesses to avail significant loan which can be used as a working capital for advertisement, salary payments of staff, opening a new branch, tax liabilities, emergencies, purchasing inventory and anything else that will help progress the business.

Merchant cash advance for Purchase of equipment

In the beauty industry competition is immense and if your business is tottering or gathering cobwebs its time to infuse some new life into it. By investing in new and latest equipment and repairing the old ones you will be taking the first step to expansion. You can obtain an unsecured loan for a short term from lenders like us based on the type of equipment and the original cost of the equipment.

When you purchase an equipment by the end of the loan period the machine belongs to you but if you lease it you cannot own the machine, thus it is a waste of money. The one time when leasing makes sense is when you need the machine for a short duration, like for example till the delivery of the new equipment.

Additional financing

Sometimes the finance obtained from the merchant cash advance may not be enough to meet all your needs or there is an urgent need for a working capital. In such a situation when you need additional financing you can consider 1stposition, 2nd position, 3rd position, 4th and even 5th position cash advances.The word position means a lender knows that depending on the number his claim on the assets of the business if a borrower default will be only after the previous claimant. Thus, the 5th position lender will be able to claim only after the 4th position lender. And that is the reason as the number increases the interest rate becomes steep because here the funder knows that he may not get anything after all the other claimants have taken their share.

A point to note here is that 2nd position cash advance term is always shorter than the first cash advance. You must resort to these positions only as a last resort.

Don’t forget to factor the factor rate

When you are doing the necessary calculations on what will the final amount you have to pay to clear your loan you must know the factor rate. Most often the terms of lending will include the factor rate based on which the actual or final interest will be calculated. For example, if you get a loan or advance of 100 K with a factor rate of 1.2, then the final amount that you pay back will be $100,000 times 1.2 which is equal to 120K.

Thus, for small businesses, it is very important to know the factor rate before applying for merchant cash advance because it is different from interest rate as it is calculated on the full principal amount, unlike interest rate which is on the balance amount.


The lack of business funding should never put a brake on your ability to expand and explore more opportunities. To let your dreams take wings you can avail merchant cash advance is a short-term solution for your finance issue; this is probably the best alternative for revolving credit as you get the full amount in advance. If you wish to know more about how merchant cash advance and the various loan terms and how we can help in financing procurement of new equipment for your spa or beauty center do not hesitate to get in touch with us.

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