Best Revenue-Based Financing for Salons and Barbershops

The best revenue-based financing for a salon or barbershop is the one that's repaid from what comes in through your chairs, eases off when the book is slow, and doesn't leave you short for product and rent. For fast capital, Merchant Fund Express, our recommended funder, reviews your sales and deposits, considers credit from a 500 FICO, accepts ITIN applicants and offers Spanish-speaking support. If you take payments through Square, its loans are repaid with a fixed percentage of card sales; for chairs or equipment, equipment financing usually fits better; and if you can wait, an SBA microloan costs less.

Salons and barbershops have a quirk most businesses don't: the owner often doesn't collect everything that's sold in the shop. There are commission stylists, barbers who rent their chair, tips and retail product sales. That changes what a funder sees in your account and how much it can offer. Below we compare six options using data from official sites checked on October 20, 2026.

The 6 best options for salons and barbershops

1. Merchant Fund Express (recommended funder). Best if your salon or barbershop deposits its sales regularly and you need capital soon: a remodel, more stations, opening a suite, or stocking up for the busy season. Approval looks at your sales and deposits, not just your credit. It considers profiles from a 500 FICO, with amounts from $5,000 to $5,000,000 and decisions that often arrive in 2–4 hours. Collateral isn't required in most cases. It accepts ITIN applicants, offers Spanish-speaking support, and applying is free with no impact to your credit.

2. Square Loans. Only for businesses that process with Square. According to its site, offers range from $100 to $500,000, repay automatically with a fixed percentage of your daily card sales, carry a single flat fee, and include minimum payments shown in the offer. Applying doesn't affect your credit, there's no collateral up to $100,000, and a personal guarantee is required above $250,000. Best if your bookings and checkout already run through Square.

3. Percentage-of-sales financing. Several funders hold back a percentage of what you sell instead of a fixed amount. It's the best fit if your sales jump in May and June with prom and graduations, during wedding and quinceañera season, or in December, and then drop in January. Always ask whether there's a minimum payment.

4. National Funding (working capital). Up to $500,000, with fixed daily or weekly payments over 4 to 24 months, per its site, which also says most of its customers have a 600+ FICO. In some states it only offers sales-based options. It suits salons with a loyal clientele and a full book all year.

5. Equipment financing. For hydraulic chairs, shampoo bowls, dryers, nail stations, treatment beds or esthetics equipment. The equipment backs the payment and the term follows its useful life, so it usually costs less than working capital for that purchase.

6. SBA microloan or CDFI. SBA microloans go up to $50,000, with a maximum term of seven years and rates that generally run 8% to 13%, according to the SBA. They're made by nonprofit community lenders that also provide coaching. Ideal for a barber opening a first shop.

How we chose. We don't use ratings, scores or made-up statistics. We compared criteria you can check yourself: speed, minimum time in business, minimum credit, ITIN or no-SSN acceptance, documents, amounts and collateral. For salons and barbershops, we also weighed how the payment is collected and how each option treats sales that never touch the owner's account. Read the full method on how we rank business funding options.

Comparison table

"Ask" means we don't assume the answer. Get it in writing before you sign.

Commission, chair rental and tips: what the funder sees

A funder looks at what lands in your business account. In a salon or barbershop, that depends on how you work with your team:

• Commission stylists or barbers: every service is rung up under the business and you pay commissions afterward. Your deposits look high, which helps, but the funder will also see the payroll or commission payments going out.
• Booth or chair rental: each barber charges the client directly and pays you weekly rent. Your deposits are only the rent, far less than what's sold in the shop, and your offer will be based on that rent, not total sales.
• Salon suites: similar to chair rental, but with longer leases. Keep the agreements handy; they show stable income.
• Tips: if they come in by card and you pass them to your team, they inflate your deposits but aren't yours. Separate them in your reports so nobody mistakes them for sales.
• Retail product: shampoo, color, wax and beard products are real sales. If you ring them up separately, include them in your reports.

To understand the product in depth, read our guide to revenue-based financing for salons.

Which to choose for your shop

• Small barbershop with two or three chairs and lots of cash: deposit everything for several months before you apply. Then look at a deposit-based funder, or a microloan for your first equipment.
• Salon with a full book and card payments through Square: compare the Square Loans offer with at least one other offer. Convenience isn't always the cheapest choice.
• Nail or esthetics studio with expensive equipment: equipment financing for the stations or treatment bed, and revenue-based capital only for everything else.
• Owner who rents out chairs or suites: your income is the rent. Ask for an amount in line with that rent and show the agreements.
• Salon gearing up for the busy season (prom, quinceañeras, weddings, December): a percentage payment, so the holdback shrinks on its own in January.
• Barbershop opening a second location: working capital for the launch and, if you qualify and can wait, compare a term loan or SBA loan for the build-out.

If you'd rather have a cushion to draw and repay than a lump sum, compare a business line of credit for salons.

Will the payment survive your slow weeks?

In a salon, slow weeks are predictable: the first half of January, the week after a long holiday weekend, or when a top stylist leaves and takes clients along. Before you sign, run this simple test:

1. Find your worst week of the past year in your bank statements.
2. Subtract the fixed costs: rent, product, utilities, insurance, licenses and what you pay your team.
3. Look at what's left. With a fixed payment, the payment has to fit there. With a percentage payment, check that the minimum payment fits too.
4. Ask for what you need, not the maximum. A $20,000 remodel, for example, doesn't need a $40,000 offer.

If a payment is already squeezing you, work with your current funder to lower the payment instead of stacking another advance on top. If you're deciding between an advance and other kinds of capital, also compare a merchant cash advance for salons.

Documents and common mistakes

Documents you'll be asked for: 3 to 6 months of business bank statements; reports from your booking or POS system; your cosmetology or barbershop establishment license; the lease for your space; chair or suite rental agreements if you have them; ID plus an SSN or ITIN, depending on the funder; and your EIN.

Common mistakes:

• Mixing tips in with sales and asking for an amount your real business can't support.
• Not depositing cash and then getting a low offer.
• Running the salon through your personal account. Keep the accounts separate; reviews go faster and better.
• Signing without understanding the contract. Ask someone to walk you through it: payment frequency, minimum payment, personal guarantee and what happens if you switch payment processors.
• Trusting "sure-thing" approvals. No serious funder promises approval without reviewing your business.

If you have an ITIN or a green card, keep in mind that since March 1, 2026, SBA 7(a) and 504 loans require 100% of owners to be U.S. citizens or nationals. This isn't immigration advice; talk to an immigration attorney about your situation. Once your bank statements are ready, you can apply with Merchant Fund Express; it's free and doesn't affect your credit.