Nail salons are big business. In the United States alone, there are over 200,000 of them. And while that number has been growing steadily over the past few years, the industry is still relatively fragmented, with the vast majority of businesses being small, independently-owned shops.
Accessing capital often poses a challenge for these small businesses. Traditional bank loans can be hard to obtain, and even if they are available, the terms can be unfavorable. This is where short-term financing comes into play.
Short-term financing is a loan type that promptly provides businesses with the capital they need. In many cases, lenders can approve short-term loans within a few days, depositing the money into your account shortly after approval.
For one small nail salon in Wisconsin, recovering from COVID presented a challenging task. Although they managed to pay rent and maintain their lease throughout the pandemic, they couldn’t retain their staff on payroll. Once nail salons were able to reopen, they found that they needed access to additional capital to get the business up and running again.
The owners utilized a short-term loan to acquire the working capital required for buying supplies, rehiring their staff, purchasing protective gear, and advertising their reopening.
Short-term financing offers a primary benefit of versatility, enabling you to utilize it for various purposes, such as purchasing inventory, making repairs, or handling unexpected expenses, granting you the flexibility you need. By obtaining a short-term loan, the owners avoided the need to seek approval for each expense.
The owners’ applied for a $60,000 short-term loan for 24 months. The application process for a short-term business loan was quick. They received approval within one day of submitting the application. The application required the owners to provide a completed application. Additionally, they needed to submit a few months of bank statements and their business tax return.
Short-term unsecured loans have higher interest rates than longer-term loans. However, the rate was less than they would have paid on their credit cards. Moreover, they did not have to pledge any of their personal assets to secure the business loan.
After the stressful 18 months of being forced to close, the nail salon was able to reopen and hit the ground running with access to the capital they needed. Within six months of reopening, their revenue was already at pre-pandemic levels.
If you’re a small business owner in need of capital, short-term financing may be the right solution for you. With its flexibility and favorable terms, it can provide the funding you need to grow your business.
Casey has 12 years of technical writing experience. She is also a CPA and bookkeeper. Casey graduated from the University of St. Thomas (Minnesota) with a B.A. in mathematics and currently resides in San Diego, CA.
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