Getting Salon Equipment Financing With No Credit Check
Salon equipment financing is a small business loan meant specifically for the purchase of salon equipment. The salon equipment that a borrower purchases with the proceeds of the financing will then act as collateral for the very salon equipment financing used to purchase it.
Salon equipment financing with no credit check, if you’re able to find it, will be expensive financing.
Because salon equipment financing will come in large loan amounts—by nature of financing large, expensive pieces of equipment—almost any lender out there offering it will require a credit check. And if a lender is promising you salon equipment financing, no credit check required, then you should tread carefully. To mitigate the risk that comes from not checking a borrower’s personal credit for their loan application, most of these lenders will pile on fees and interest.
That said, you might be surprised what salon equipment financing your personal credit score could qualify you for. And if your credit doesn’t qualify you for salon equipment financing, you can access smaller amounts of short-term financing, which will be more accessible for bad credit borrowers than salon equipment financing is.
The best alternatives to salon equipment financing with no credit check are:
- Balboa Capital
- Crest Capital
- Currency Capital
- OnDeck Capital
We’ll break down these options, along with how you can set your salon up for future success, with our guide to finding salon equipment financing with no credit check requirement.
Salon Equipment Financing Options
As a reminder, salon equipment financing with no credit check won’t be readily available. And if it is, it will be pretty expensive. That said, there are a few equipment financing companies out there that salon owners with less-than-perfect credit will be eligible to work with. So, instead of searching in vain for no credit check salon equipment financing, consider these equipment financing options that are more accessible than traditional equipment loans:
1. Balboa Capital
One of your best options for salon equipment financing for bad credit will be Balboa Capital. If you’re working with a personal credit score of at least 600, at least $100,000 in annual revenue, and at least a year in business, then you’ll be eligible to access salon equipment financing through Balboa Capital.
Salon equipment financing from Balboa will have a lease and buy-back structure. Balboa Capital also offers a corporation-only guarantee option, so if you’re hesitant to provide a personal guarantee—or you have an amazing business credit score—this could be your very best salon equipment financing option.
With this equipment financing option, borrowers are able to access from $2,000 to $500,000 in equipment financing, with terms from two to five years long and rates as low as 3.99%. If you qualify for Balboa Capital financing, then you could have access to financing within the same day that you apply.
All in, salon equipment financing from Balboa Capital will be a top option for business owners with 600+ credit who are looking for low rates and quick access to funds.
2. Crest Capital
A top-rated equipment financing company, Crest Capital, is yet another stellar option for salon owners looking for funding to purchase equipment. Crest Capital offers equipment financing and leases in pretty much any structure you could think of, so if you want to explore options beyond traditional equipment loans, Crest Capital could be the best place to start.
Salon equipment financing from Crest Capital can be from $5,000 to $500,000 with terms from two to six years and rates as low as 5%. Unfortunately, though, bad credit salon equipment financing isn’t available through Crest Capital, as they’ll require personal credit of at least 650 for a borrower to be eligible. You’ll also need at least two years in business to apply for equipment financing from Crest Capital, but they don’t name a minimum annual revenue.
3. Currency Capital
Finally, one last salon equipment financing option is Currency Capital. Currency offers salon equipment financing to those with personal credit of at least 620 and with annual revenue of at least $120,000. Currency doesn’t name a minimum time in business for an applicant to be eligible. But, as always, the more established your salon is, the more likely you’ll be able to qualify for this equipment financing option.
Salon equipment financing from Currency can come in amounts from $5,000 all the way up to $2,000,000 with repayment terms from six months to seven years and rates starting at 6%.
If you’re hoping to access salon equipment financing for a new salon, then Currency Capital will be your best bet. Just make sure you meet their minimum credit score and annual revenue requirements, and you’ll have a shot at qualifying for financing from Currency.
Salon Financing for Bad Credit
If you’re not able to qualify for any salon equipment financing options, then you should instead consider business capital sources that are available to borrowers with lower credit, less annual revenue, and less time in business.
As you search for bad credit business loans, your first impulse might be to turn to merchant cash advance companies. After all, merchant cash advances are remarkably easy to qualify for, and that can be enticing for borrowers on the hunt for no credit check financing.
However, merchant cash advances are often the most expensive options for borrowers. Even more, they might not even be the most accessible option, depending on your credentials.
Here are three non-MCA short-term financing options for salon owners with bad credit:
If you’re determined to find no credit check financing for your salon, then Fundbox is your very best option. Fundbox is an online lender that offers quick, accessible invoice financing. Through invoice financing, businesses are able to access advances for their outstanding invoices that are secured by the invoices themselves.
Invoice financing from Fundbox won’t come with a credit check, so Fundbox doesn’t name a credit minimum for applicants to be eligible. In fact, you’ll simply need six months in business, a practice of invoicing customers, and accounting software to be eligible for Fundbox.
Through Fundbox, you’ll be able to access $1,000 to $100,000 in invoice financing with three- to six-month repayment terms. Rates will come in the form of 0.5% to 0.7% of the original invoice value for every week it remains unpaid.
If your salon invoices customers, then Fundbox is your best option for no credit check salon financing.
2. OnDeck Capital
Another financing option for salon owners is OnDeck. OnDeck is an online lender that offers short-term loans and lines of credit. To be eligible for their short-term loan, you’ll just need personal credit of at least 500, at least $100,000 in annual revenue, and at least a year in business. To be eligible for more sustained capital through their short-term line of credit, you’ll need personal credit of at least 600, at least $100,000, and at least a year in business.
Salon financing in the form of a short-term loan from OnDeck can range from $5,000 to $250,000 with terms from three months to two year and rates from 8.5%. OnDeck lines of credit, on the other hand, will come with credit limits from $5,000 to $100,000, repayment terms from six months to a year, and rates starting at 13.99%.
A short-term loan from OnDeck will be a solid, relatively affordable option for salon owners with struggling credit who need access to capital now.
Finally, another online lender called Kabbage offers short-term lines of credit to salon owners with personal credit of at least 550, at least $50,000 in annual revenue, and at least a year in business. Kabbage business lines of credit come with credit limits from $1,000 to $250,000 and repayment terms of 6, 12, or 18 months.
Rates on Kabbage lines of credit will come in the form of monthly percentages of how much you borrow. If you have a 6- or 12-month repayment schedule, your interest will be front-loaded to your first months of repayment. But if you have an 18-month repayment schedule, your interest rate will remain the same for every month.
Salon financing from Kabbage distinguishes itself from other bad credit options in that it comes with monthly payments rather than the weekly or daily payments that most bad credit options come with. Choosing monthly payments over more frequent schedules could seriously save your salon’s cash flow. If you want to access salon financing for bad credit with less frequent payments, then Kabbage is your best bet.
Salon Equipment Financing: Building Credit to Access It
If your personal credit doesn’t qualify you for your salon equipment financing options, we suggest you take time to build credit rather than searching for salon equipment financing with no credit check. It might seem like a hassle to take time to build credit, but it could set your salon up for long-term success. Plus, taking on a short-term form of salon financing right now could help you access longer-term equipment financing in the future.
To encourage you to set your salon up for success, we’ve compiled a guide to leveraging your salon financing to access more specific, longer-term salon equipment financing in the future:
1. Take On Short-Term Financing.
Because short-term finance is, by nature, easier for borrowers with bad credit to access, we suggest salon owners with struggling credit consider their short-term options if they need funding right now. Bonus points if you access short-term financing for your salon from a lender that reports personal credit bureaus.
2. Access a Secured Credit Card.
As you’re running your salon, access a secured credit line with a secured card like the Capital One Secured Mastercard. Secured credit cards allow those with struggling credit to access a credit limit that’s collateralized by a cash deposit. As you spend responsibly with a secured card, you’ll see your credit score improve.
3. Pay On Time, Every Time.
For both your short-term salon financing and your secured credit card spending, you’ll need to make your payments on time, every time. After all, your payment history determines 35% of your FICO score, so the most sure-fire way to improve your personal credit is to make sure you’re accumulating a track record of on-time payments.
4. Build Credit Until You Reach 600 to 650.
Now, if you diligently tend to steps one through three, then step four will unfold naturally. Taking strides to repay multiple forms of debt with steady, on-time payments will help you build personal credit.
Keep at it until you reach the minimum credit scores of equipment financing companies like the ones we’ve highlighted above. 600+ and 650+ credit will typically get you in the door with top salon equipment financing options, but be sure that you also fulfill their other minimum requirements before you apply.
5. Apply for Salon Equipment Financing and Welcome a Credit Check.
Once you’ve dedicated the time and energy to build your personal credit to meet the requirements of salon equipment financing options, you’re ready to apply for salon equipment financing with a credit check.
Be sure to understand the difference between a soft pull vs. a hard pull and ask potential lenders which they’ll perform while they evaluate your application. A hard pull could ding your newly-improved credit, but, of course, it could be worth it for your long-awaited salon equipment financing.
Salon Equipment Financing with No Credit Check: The Bottom Line
There you have it—your complete guide to navigating your salon equipment financing options as a bad credit borrower. You might have started your search with the intention of getting salon equipment financing with no credit check requirements. Unfortunately, this isn’t a feasible option for most—not only because it will be tough to find, but also because no credit check equipment financing will be very expensive if you’re able to find it. Accessing short-term salon financing right now, and taking the time to build your personal credit gradually, will set you up to access equipment financing for your salon in the near future.