What do beauty owners typically use working capital for?
Mostly for costs that don't come with a serial number. Stylists moving into a suite use it for deposits and opening color. Lash artists and estheticians use it for training and supplies. Salons use it to stock retail before the holidays, and brands use it for packaging deposits. It fills the gaps equipment financing and term loans can't.
- Opening inventory: color, backbar, lash and nail supplies, and retail shelves.
- Education: extensions, color correction, lash or brow certification, or device training that isn't bundled on a quote.
- Deposits and move-in costs: a suite or storefront deposit, booking software, insurance and signage.
- Staffing ramps: extra hours ahead of prom, wedding and holiday season.
- Marketing: a grand opening, a new-service launch or a relocation announcement to your client book.
Moving from booth rental? The suite move guide shows how working capital and equipment financing usually split the costs.
How is working capital repaid?
It's usually a lump sum repaid on a set schedule, with payments that may be daily, weekly or monthly depending on the funder and product. Terms are typically shorter than equipment financing or term loans. Before accepting, check how the payment lines up with your slowest weeks, not your busiest Saturday.
A salon that earns most of its revenue Thursday through Saturday feels a daily debit differently from a med spa billing memberships monthly. Ask whether a weekly or monthly schedule is available and compare the total repayment on each. If flexible draws suit you better than a lump sum, look at a business line of credit.
| Option | Best for | Typical term |
|---|---|---|
| Working capital | Inventory, training, deposits, marketing | Shorter, often months |
| Line of credit | Recurring or seasonal gaps | Revolving: repay and draw again |
| Equipment and device financing | Chairs, pedicure chairs, lasers, facial devices | Often matched to equipment life |
| Term loan | Build-outs, renovations, second locations | Longer, with set payments |
What does working capital cost compared with other options?
Working capital typically costs more than equipment financing or a term loan, because nothing secures it and the term is short. It can still be the right choice when the use pays back fast, such as retail stock that sells through in one season. The mistake is using it for long-lived assets that take years to earn back.
A good fit: stocking holiday retail you've sold through before, training that adds a bookable service within weeks, or a suite deposit when your book is already full.
A poor fit: a full salon build-out, an aesthetic laser or anything you'll still be using years from now. Those usually belong on term loans or equipment and device financing.
What do funders review for working capital?
Requirements vary by product and funder; many look at time in business, monthly revenue and credit. For a salon, studio or med spa, deposit history matters a lot: consistent card deposits, a client book that rebooks and the payments you already carry. Strong credit tends to improve terms, while a full book can open options for newer businesses.
Useful documents usually include recent business bank statements, card processing statements and a short description of the use. Cash services and tips that never reach the bank don't show up, so depositing and recording income matters. See how it works for the full process.
When should a beauty business skip working capital?
Skip it when the need is ongoing rather than temporary. If rent and payroll exceed revenue every month, new funding adds a payment without fixing the gap. It's also a poor match for devices and build-outs, and for owners already carrying daily debits that strain cash. In that case, ask about options to lower your payment first.
Before borrowing for a slow stretch, look at your deposits by month for the past year. A predictable dip after the holidays is a timing gap. A steady decline is a pricing, staffing or rebooking problem that funding alone won't solve.
How do you plan the cash for a new service launch?
Keep four things apart: appointments that are only booked, deposits you have collected, what you owe out before the first full week, and repeat bookings you can count on. A booked calendar is not cash, and a deposit is partly owed back if the client cancels. Size any funding to the lowest point of the running cash line, not to the total of your costs.
The example below adds one service, such as lash extensions or color correction, at a $120 average ticket with a $30 deposit. Every number is made up to show the method. They are not benchmarks, quotes or a promise of what any business will earn or qualify for. Replace each one with your own bookings, prices and costs.
| Line | Month 1 | Month 2 | Month 3 |
|---|---|---|---|
| New-client bookings | 20 | 22 | 28 |
| Repeat bookings (50% of last month's completed visits) | 0 | 8 | 12 |
| Total booked | 20 | 30 | 40 |
| Completed visits (80% of booked) | 16 | 24 | 32 |
| Cancelled, deposit refunded | 4 | 6 | 8 |
| Deposits collected ($30 per booking) | $600 | $900 | $1,200 |
| Balances collected at the visit ($90) | $1,440 | $2,160 | $2,880 |
| Deposit refunds | -$120 | -$180 | -$240 |
| Net cash collected | $1,920 | $2,880 | $3,840 |
| Training and certification | -$1,800 | $0 | $0 |
| Opening and restock inventory | -$1,200 | -$500 | -$600 |
| Provider and assistant pay | -$2,200 | -$2,400 | -$2,600 |
| Total cash out | -$5,200 | -$2,900 | -$3,200 |
| Net cash for the month | -$3,280 | -$20 | $640 |
| Running cash position | -$3,280 | -$3,300 | -$2,660 |
In this example the running cash position bottoms out at -$3,300 at the end of Month 2 and is still -$2,660 after Month 3, even though monthly cash turns positive. Two things follow. First, the amount you need is closer to $3,300 plus a cushion than to the $11,300 of total costs. Second, any repayment is on top of these lines, so check that the payment fits the Month 1 and Month 2 net figures, which are the weak ones.
- Booked is not collected. Only completed visits and kept deposits count as cash. This example assumes 80% of bookings are completed.
- Repeat bookings are counted low. Only half of last month's completed visits rebook, and none in Month 1. Use your own rebooking rate once you have a few months of history.
- Refunds and prepaid packages are obligations. Refunded deposits are shown as cash out. The plan counts no prepaid packages; if you sell them, the money received is owed back as future services, so don't treat it as free working cash.
- A plan is not an approval. A funder reviews your actual deposits, statements and history. A strong launch plan can help you choose an amount, but it does not guarantee eligibility for any product.
What you’ll typically need
- Recent business bank statements
- Card processing statements
- Government-issued photo ID
- A short description of how the funds will be used
Frequently asked questions
Can a stylist who just moved into a suite get working capital?
It's possible. A short business history makes it harder, but funders also look at deposits, and a stylist who brought a rebooking client book usually shows steady card revenue quickly. Requirements vary by product and funder. Having your booth-rental deposit history in a business account can help show the client base came with you.
Is working capital the same as a merchant cash advance?
Not exactly. Working capital is a broad term for funding used to run the business, and it can be structured as a short-term loan or as revenue-based financing repaid from future sales. The structure changes the cost and how payments work, so read the agreement and compare total repayment rather than relying on the label.
Can I use working capital to hire a new stylist or provider?
Yes, many owners use it to cover payroll while a new hire builds a book. Plan the ramp conservatively: a new stylist may take months to fill a column, and funders underwrite your current deposits, not the revenue you expect the hire to produce. Make sure the payment still fits if the ramp is slow.
How fast is working capital funded?
It's often among the quicker options. Some approvals come within a day or two, depending on documents, though timing varies by funder and by how complete your file is. Having bank and card processing statements ready speeds things up. Speed shouldn't be the deciding factor, so still compare total repayment before you sign.
Can working capital cover training for a new device?
Yes, when the training isn't already bundled on the device quote. It's often cleaner to include manufacturer training in the equipment financing itself. BeautyFundr does not give licensing, medical or legal advice; rules vary by state, so confirm who may perform the service before paying for the training.
Cover the costs that move you forward
Tell us what the working capital is for and review the options your file supports.
Updated September 14, 2026 · BeautyFundr Funding Team