April 1, 2026 Retail & Consumer Services

Commercial Mortgages for a Hair Salon or Barbershop, Explained

Many salons and barbershops rent on high streets or in neighbourhood centres, anchoring your brand, regulars and walk-ins to that address. Owning the premises turns rent into equity and gives you control of fit-out, signage and tenure. Ardent Capital Group speaks with salon and barbershop owners about this kind of purchase, and this guide walks through how the finance works.

Ardent Capital Group works with hair salon and barbershop owners across Australia who are moving from tenant to owner, with clear lending advice on structure and strategy.

Funding scope: Finance from $100,000 to $10,000,000+ for premises purchases and related needs.
Track record: Over $500,000,000 in loans arranged across the past decade.
National coverage: Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra, Hobart and surrounding regional towns.
Sector focus: Hair and barber clients with single-site and multi-site footprints, in shopping centre and high street locations.

Owning vs leasing your hair salon or barbershop

Your fit-out is expensive and tied to the site. Plumbing for backwash basins and hot water, electrical for dryers and lighting, mirrors and joinery, reception and retail shelving, ventilation and acoustic treatment, and premium flooring are sunk costs that work best amortised over a long hold. Your clientele is local and habitual, so the address, parking and visibility drive repeat bookings and chair utilisation. Hair is a resilient spend with steady rebooking cycles, memberships and chair rental agreements that stabilise cash flow. Mortgage repayments build an owned asset on your balance sheet.

Main drivers:

Control: Lock in tenure, renovate on your schedule, and secure signage rights and operating hours with fewer restrictions.
Cost certainty: Replace rent escalations with a repayment you can forecast, especially on principal and interest.
Asset building: Capture equity through repayments and future capital growth while the business pays rent to your property entity.
Income flexibility: Offer spare rooms or stations to barbers, colourists or beauty therapists on commercial terms.

Buying may suit less well when you plan to relocate within a short horizon, when the centre is due for redevelopment, when chair count needs to double soon, or when your capital works harder in hiring senior stylists, education, marketing or a second site. The decision sits with you, and it is one worth mapping properly.

If buying your premises is on the horizon, our salon property loan team can map the numbers with you.

What a hair salon or barbershop commercial mortgage looks like

Deposit and LVR. A salon or barbershop shopfront is standard commercial security, the same lending bucket as an office or a warehouse, and it typically gears up to 80 per cent. That puts the deposit at around 20 to 25 per cent. The major banks do not publish an owner-occupier commercial LVR and assess each file case by case, which is one clear reason to run the deal through a broker. A full 100 per cent of the purchase price is only reached using additional security you already own, such as equity in your home, since there is no stand-alone product at that level for a salon.

Loan term and structure. Terms commonly run to 25 years, and up to 30 with some non-bank lenders, against the 10 to 15 years on the banks' published commercial products. You can set principal and interest for steady equity build, or interest only for up to five years if cash flow needs priority during fit-out or team expansion.

Security and serviceability. The property is the primary security. Lenders assess business financials, banked revenue, BAS, wages as a percentage of turnover, and how comfortably the proposed repayments sit alongside other commitments. Chair rental is treated as a licence rather than a sublease, so a lender looks through it to your core service revenue, and documented chair agreements with banked receipts both help.

Owner-occupier treatment. Lenders generally view owner-occupied commercial property favourably, given lower vacancy risk and the strong alignment between business performance and occupancy.

Common ways to hold the property

Many salon owners hold the freehold in a separate entity, a company or trust, that leases the premises to the trading business at a commercial rent. The trading entity pays the rent, the property entity receives it and services the mortgage, and a lender reads that inter-entity rent as the serviceability line. This arrangement separates risk and simplifies a future sale or succession, and it is worth running past your accountant before the loan application goes in.

SMSF. Commercial premises used wholly in a business generally qualify as business real property, so a self-managed super fund can hold a salon or barbershop premises through a bare, or custodian, trust under a limited recourse borrowing arrangement, then lease it back to the trading business in writing at market rent. A salon trading wholly as a business qualifies; a shopfront with a flat above it on the same title generally will not. The arrangement funds this one property as the fund's single asset, so chairs, basins and fit-out are financed separately and the fund needs its own deposit rather than drawing on other security. SMSF LVRs on standard commercial security such as a salon or barbershop shopfront typically run 65 to 80 per cent. Ardent's part is arranging that borrowing and testing it against the lease and the fund's figures; your accountant and SMSF specialist confirm how it fits your contribution caps, fund liquidity and the title before contracts exchange.

How your application is assessed

Business financials: Two years of financials and BAS, banked takings, evidence of recurring bookings, chair rental income and retail mix.
Serviceability: Debt coverage using historical and current trading, wages to turnover, rent-to-sales ratio, and headroom for seasonality.
The property: Location strength, frontage, parking or centre foot traffic, power and plumbing capacity for basins and dryers, and strata or freehold terms.
Valuation: Independent valuation on comparable sales and achievable rent, plus fit-out quality and remaining economic life. Many fit-out items are treated as equipment and not fully counted as security.
Deposit and equity: Saved cash, equity in other property you can use as additional security, or vendor terms where appropriate.
Lease and occupancy: The proposed lease between your property entity and trading entity, market rent and tenure.

A specialist broker who understands salon economics, chair utilisation and fit-out realities shortens the path and keeps the file moving.

How this might look in practice

This is an illustrative scenario that shows the kind of situation we can assist with, and how the thinking might run.

Situation: An inner west Sydney salon with eight chairs and two basins pays $8,500 a month in rent, has consistent rebooking and two contracted chair renters. A 110 sqm strata shop with existing plumbing comes to market at $1,200,000.
Objectives: Secure tenure, stabilise occupancy cost, and leave headroom for a $150,000 refurbishment over 12 months.
Options that could be mapped:
- An 80 per cent commercial mortgage, a deposit of around $240,000, on principal and interest over 20 years, with a separate $150,000 fit-out facility amortised over five years.
- A lower-geared mortgage held on interest only for 12 months during the refurbishment to preserve cash flow, then switched to principal and interest.
Structures that could be considered: The property held in a family trust and leased back to the salon at market rent, with an SMSF path noted for a possible future site.
How we would approach it: We would map the ranges, structures and repayments, pressure-test serviceability and lender appetite, and set out terms and covenants. The figures above are illustrative, not confirmed outcomes, and the decision stays with the owner.

Finance types for hair salon and barbershop owners

Asset finance for salon equipment: Chairs, backwash units, dryers, steamers, POS and salon software, hot water and air conditioning, funded as salon equipment finance so the fit-out sits on its own facility.
Fit-out and refurbishment finance: Plumbing rough-ins, power upgrades, mirrors and joinery, flooring and lighting, staged against builder milestones.
Working capital loans: Smooth colour stock purchases, retail inventory and seasonal campaigns with cashflow finance for a salon, without draining cash.
Business overdraft: A flexible buffer for short booking lulls, product intake and centre outgoings.
Refinancing and debt consolidation: Reset terms, reduce total repayments and align facilities to current turnover and margins.
Construction and renovation funding: Base-build contributions, new shell fit-outs, centre-mandated upgrades and compliance works.
Business or premises acquisition finance: Buy the freehold, acquire a second site, or buy in or buy out a partner on aligned terms.

Owning the premises can free equity for growth, while a refinance can consolidate facilities and improve cash flow planning.

A broker who knows hair salon and barbershop property

Ardent Capital Group arranges and structures finance around how you plan to hold and occupy the property, including trust, company or SMSF pathways. We service Sydney, Melbourne, Brisbane, Gold Coast, Perth, Adelaide, Canberra and surrounding metro and regional areas, and have helped facilitate over $500,000,000 in funding across a decade for more than 1,000 borrowers. This is the kind of purchase where the structure and the strategy matter as much as the rate, so we give clear advice on both, and stay with you for the years and the wealth you are building beyond settlement.

Your questions answered

How much deposit do I need to buy a salon premises? A typical range is around 20 to 25 per cent, with LVRs up to 80 per cent for standard commercial security. The major banks assess owner-occupier commercial deals case by case rather than publishing a figure.

Can I use my home equity towards the deposit? Yes. Many owners use equity in a home or other property to reduce the cash they put in, with a plan to uncross it as the loan reduces.

Does my fit-out count towards the valuation? Valuers recognise quality fit-out, though many items are treated as equipment and not fully included as security. We structure funding so the fit-out sits in a separate facility where that makes sense.

Can an SMSF buy my salon property and lease it to my business? Yes, commercial premises used wholly in a business usually qualify as business real property and can be leased to your business at market rent. There are borrowing and contribution limits to weigh, and your accountant confirms the detail.

Will lenders accept chair rental income in serviceability? Yes, when supported by documented agreements and banked receipts. Lenders also look at your core service revenue and wage ratios.

What loan term suits a salon? Terms commonly run to 25 years, and up to 30 with some non-bank lenders. Shorter terms build equity faster, and interest only periods can assist during refurbishment or team expansion.

What if I plan to relocate or open a second site soon? You might hold cash for growth, or buy a site that suits the next stage. We model both options so you can decide where your capital works hardest.

Written by

Nick Chong

Managing Director, M.AppFin, Dip. Mortgage Mgmt

Nick holds a Bachelor of Agricultural Economics, a Master of Applied Finance and an Advanced Diploma in Financial Planning. He founded Ardent Capital in 2016 after more than a decade in financial planning and mortgage broking. For the past ten years he has led a team of finance specialists, mortgage advisers, brokers and credit analysts, all working to secure optimal outcomes for clients and always acting in their best interests. The team brings both a qualitative and a quantitative approach to every deal.