What makes a hair salon build-out different?
Water and power. A salon's shampoo area needs hot water capacity, drains that handle hair and chemical rinse, and backwash units plumbed along a wet wall. Dryers, processors and hot tools running at once put heavy load on the electrical system. Those two systems usually drive the budget more than finishes, so get them bid first.
The wet wall
Supply lines, drains with hair traps, water heater capacity and backwash unit placement. Reusing an existing wet wall in a former salon can save a lot.
The power
Circuits sized for dryers and heat tools at every station, plus lighting that shows true color.
The air
HVAC that handles heat from dryers, and ventilation for color and chemical services.
The finish
Flooring that tolerates water and chemicals, stations, mirrors, a reception desk and retail display.
How do tenant-improvement allowances work?
A tenant-improvement allowance is money or work a landlord contributes toward preparing the space, usually negotiated in the lease. It can cover part of the plumbing, electrical or finishes, which lowers what you need to borrow. Allowances are often paid as reimbursement after work is complete, so you may still need funding to cover costs until the landlord pays.
Negotiate before you sign, and get the allowance amount, what it covers and when it's paid in writing. A longer lease can sometimes earn a larger allowance. Have your attorney review the lease terms, since BeautyFundr doesn't give legal advice.
| Stage | Work | Usually funded by |
|---|---|---|
| 1 | Demolition, rough plumbing for the wet wall, rough electrical | Term loan draw |
| 2 | HVAC, ventilation, walls and inspections | Term loan draw |
| 3 | Flooring, lighting, finishes, reception | Term loan draw |
| 4 | Chairs, stations, backwash units, dryers | Equipment financing |
| 5 | Opening product, marketing, payroll cushion | Working capital |
How do draw schedules work on a salon build-out?
Instead of one lump sum, funds are released in stages as work is completed, often tied to contractor invoices or milestones such as rough plumbing, electrical and final finishes. Draws keep money matched to progress and protect you from paying for unfinished work. Ask when payments begin, since some agreements start repayment before the salon opens.
Keep a contingency for surprises behind walls, especially in older buildings. See build-out and expansion term loans for more on how draws are structured and why lease length matters.
Should chairs and backwash units be on the build-out loan?
Usually not. Styling chairs, stations, backwash units and dryers fit equipment financing better, because the equipment secures the agreement and the term can match its useful life. That keeps the build-out loan smaller and focused on construction. Coordinate delivery dates so equipment payments don't start weeks before the salon can open.
A full salon package from one dealer can typically go on one agreement with delivery and installation itemized. See equipment and device financing.
What do funding partners need for a salon build-out?
Requirements vary by product and funder; many look at time in business, monthly revenue and credit. For a build-out, expect them to review your deposits, the lease and its remaining term, an itemized contractor bid, a floor plan or scope of work and your experience. They generally prefer a lease that runs longer than the loan.
- Itemized contractor bid separating plumbing, electrical, HVAC and finishes
- Lease or letter of intent, including any tenant-improvement allowance
- Floor plan or scope of work
- Equipment quotes
- Recent business bank and card processing statements
Moving an established salon? Your current deposits carry the file. Opening a first salon? Owner experience and a documented client following matter more.
What build-out mistakes cost salons the most?
Signing a lease before pricing the plumbing and electrical, under-sizing the water heater, putting too many stations on circuits that can't carry them, skipping the contingency and funding construction with short, expensive money. Another is building out a space with only a short lease remaining. Price the hard systems first, and apply before you sign.
Planning a second location instead? Read funding a second salon location. For what salons fund beyond construction, see the hair salons page.
Frequently asked questions
How are build-out funds paid?
Often in draws tied to construction milestones or contractor invoices, rather than one lump sum. Some agreements fund at once and leave paying the contractor to you. Ask which structure applies, when repayment begins and whether the contractor's payment schedule matches the draw schedule, so work doesn't stall waiting for funds.
Does lease length matter?
Yes. Funding partners generally prefer a lease that runs longer than the loan, because building out a space you may have to leave is risky. If your remaining term is short, negotiate an extension or renewal option before starting the build-out, or consider whether relocating makes more sense.
What drives salon build-out costs?
Plumbing for the shampoo area, electrical capacity for dryers and heat tools, HVAC and the condition of the space usually drive cost more than finishes. A former salon with a usable wet wall and adequate electrical can be much less expensive to build out than a retail space starting from scratch.
Can I split equipment from construction?
Yes, and it's usually better. Equipment financing often runs alongside the build-out loan, covering chairs, stations, backwash units and dryers. That keeps each piece of funding on a term matched to what it pays for, and it can lower overall cost compared with putting everything on one loan.
Can I stay open during a renovation?
If you're renovating an existing salon, phased work after hours or on closed days can keep clients booked, though it usually costs more and takes longer. For a new space, you'll typically need inspections and approvals before opening. Confirm requirements with your contractor and local authorities.
Build a salon that works as hard as you do
Share your bid and lease details and review the options your file supports.
Updated September 14, 2026 · BeautyFundr Funding Team