If you’re looking to finance a new salon or barbershop or need some extra cash to expand, where do you start? Various options are available, so you’ll need to do your homework, take professional advice, and decide what will work best for you.

This blog post covers:

 Your business plan and cash flow forecast

In most cases you will need to have a detailed business plan and cash flow forecast in place before applying for a loan.

Read our blog post to find out more about the importance of cash flow forecasts.

A business plan is also essential if you need to borrow money.

It should include details about every aspect of your business and future plans, for example, accurate and realistic projections of your cashflow, turnover, profit and loss, and sales forecasts for the next three to five years. These must add up, make sense and appear reasonable to your bank manager or other potential lenders.

Download our free guides to find all the information you need about opening your own hair salon/barbershop or beauty business, including how to create a business plan and get finance. 

NHBF Member, MachFast allows new businesses to register their business and open a business bank account in just a few clicks.

Start up guide

Sarting a beauty business

Find out more about how to choose an accountant in our accountancy, tax and VAT blog post.

Secured or unsecured lending

One of the main decisions to make when borrowing money is whether to go for a secured or unsecured loan.

Speak to your business advisor, accountant or bank to find out more about secured and unsecured lending and which might be suitable for you and your business.

A secured loan uses your property (or other substantial assets) as security to guarantee repayment of the loan, even if you can’t make the payments. Secured loans are usually available from banks.

An unsecured loan is more straightforward and does not need to be secured against property or assets. Unsecured loans are available from a wide range of lenders.

Both have advantages and disadvantages. Find out more below.


Secured loans for your salon or barbershop business

If you own your business premises, you may be able to get a secured loan based on the value of the property.

It’s important to remember that you may lose your business premises if you can’t keep up with the repayments on a secured loan. You must be absolutely confident that a secured loan is right for you and that you will be able to pay it back.

There may be upfront admin costs when applying for a secured loan and applications can take longer than for other types of loan.

However, there are also advantages to secured loans: 

• Interest payments are often lower.
• The repayment period can be longer.
• It’s possible to borrow more with a secured loan.
• Lenders prefer secured loans for borrowers with a poor credit history.

The NHBF does NOT recommend taking out a secured loan against the value of your home because you may lose it if you cannot make your loan repayments.

Unsecured loans

If you have a good credit history it should be relatively fast and straightforward to get an unsecured loan for your salon or barbershop business. Unsecured loans can be ideal if you need a relatively small amount of money (eg £15,000).


• It can be hard to get an unsecured loan if you don’t have a strong trading position.
• It’s usually difficult to get more than £25,000 as an unsecured loan, even if you have a solid business.

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Government Start Up Loans

You may be eligible to apply for a government-backed Start Up Loan to start or grow your business. Start Up Loans are unsecured (see above).

You can borrow up to £25,000 at a fixed interest rate of 6% a year and will have between one and five years to repay the loan.

An additional benefit is that you will get 12 months free mentoring as part of the scheme, including help with creating your business plan and cash flow forecast.

To be eligible for a Start Up Loan, you must be starting a new business or have been trading for less than two years. Read more about eligibility on the Start Up Loans website and find out if you can apply.

Guide to finance

 Our comprehensive guide to the financial aspects of running a small business is available free to  Members.


New Enterprise Allowance

You may be able to get a New Enterprise Allowance to help you start your own business or develop your business if you are already self-employed.

For help with starting a business you must be over 18 and either:

• you or your partner gets Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance; or
• you get Income Support and you’re a lone parent, sick or disabled.

The scheme includes mentoring and support for your business. You may get a weekly allowance of up to £1,274 for 26 weeks and will also be able to apply for a Start Up Loan to help with start-up costs.

For help with growing your business you must be self-employed and getting Universal Credit. You may be eligible for advice and support from a business mentor and be able to apply for a Start Up Loan.

Contact Jobcentre Plus to find out more about the New Enterprise Allowance Scheme.

Business Finances, Prices, Wages and Profits Guide


This guide will help you understand the basics of financial management for your business including tax, VAT, accounting and record keeping. It’s available to NHBF Members only. Not yet a Member? Join today.


Business angels invest an estimated £1.5 billion in UK businesses every year. Business angels make their own investment decisions and are often willing to support businesses in the longer term.

Venture capitalist managers invest on behalf of a group of fund managers who expect a more rapid return.

You’ll need to understand how investment works and the agreements you’ll need to have in place. Always take professional financial advice before approaching an investor.


Time to switch? 

Have you got the right bank account for your salon or barbershop business? Or is it time to switch? Find out more.



Crowdfunding had become an increasingly popular way to fund business start-ups. You would need to post details of your project on a crowdfunding website and invite individuals to invest in your business.

There are risks for both investors and businesses, so you need to understand how crowdfunding works and what’s involved. It’s always best to take professional advice.

Borrowing from family or friends

Borrowing from family and friends is an option if you are finding it difficult to raise money from other sources.

It will need to be clear if the money is a loan or an investment to buy equity in the business. Either way, it’s always good practice to put things in writing.

If the money is a loan, agree how and when the money will be paid back. This should help to protect you from sudden demands that the full amount be repaid straight away.

If the money is an investment, you will need to explain that your business may not become successful enough to either repay them or make a profit for them.

Be aware that family or friends who invest in your business may then feel they have the right to influence how it’s run. Again, you will need to make it absolutely clear whether or not they can have a say in your business.

Borrowing from family and friends can be fraught with difficulty (even if it initially appears simple and straightforward) and may end up causing bad feeling, disagreements or even a serious rift. Be cautious. Think it through very carefully and take expert advice before going ahead. 


Self-financing your salon or barbershop business

Most people who set up their own business use at least some of their own money to finance their plans.

Always take financial advice to make sure you understand the pros and cons of self-financing and explore alternatives that may be more suitable for you and your business.


• You’ll need a detailed business plan and cash flow forecast before applying for finance.
• Make sure you understand the difference between secured and unsecured loans.
• The NHBF does not recommend using your family home to get a secured loan – you may end up losing it.
• Government Start Up Loans may be available for new and young businesses.
• You may be eligible for help from the New Enterprise Allowance.
• You may wish to consider approaching an investor or trying crowdfunding.
• Think very carefully before borrowing from family or friends or allowing them to invest in your business – things could go wrong.
• Always take professional advice and make sure you understand the pros and cons involved in the funding option you choose.