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Starting or expanding a massage practice often requires more capital than personal savings can provide. Small business funding options such as installment loans, lines of credit, credit cards, government programs, and outside investors offer different benefits and drawbacks to meet those needs. The right funding can cover startup costs, support growth opportunities, and reduce financial stress. Preparing a solid business plan, knowing your credit standing, and calculating the needed amount are key steps to securing financing.

Key Takeaways

  • Multiple funding options exist for massage practices, including personal savings, loans, lines of credit, credit cards, government programs, and outside investors.
  • Each funding method has unique benefits and drawbacks, so choosing the right one depends on business goals and circumstances.
  • Funding can cover startup costs, growth initiatives, and unexpected expenses without depleting personal savings.
  • Lenders often require a business plan, credit history, and a clear funding amount before approving financing.
  • Shopping around for favorable terms increases the chances of securing the best funding option.

Many massage practice owners seek small-business funding to get their businesses up and running, without having to pinch every penny and wait years. You can, too.

Starting a business is expensive. Costs range from obtaining licenses and forming a legal business to purchasing the necessary equipment and hiring staff. Some massage-business owners save for years to fund initial startup expenses—but putting your dream business on hold isn’t always necessary.

Understanding what small-business funding options are available, the benefits and what information you need to put together are the first steps on the path to opening your massage business or expanding your current one. (Established massage businesses can also take advantage of small-business funding to access the capital necessary to grow operations.)

Sources of Small-Business Funding

As a small-business owner, you have an abundance of sources of funding to choose from, each of which has unique advantages and disadvantages. When searching for additional capital to start or grow your business, consider the following methods:

Personal contributions

Many small massage business owners resort to personal contributions as their first method of funding. Personal contributions include everything you have saved up on your own without outside help, such as a savings or investment account.

Due to recent economic events, including rising interest rates, you might not have all the cash needed to start your massage therapy business. In fact, the Federal Reserve’s recent study shows that the median amount Americans have in savings is just $5,300.

Between professional and legal fees, marketing costs and upfront equipment purchases, you will most likely need other investors if you don’t have enough in savings. Additionally, you don’t want to drain your savings account to open your business. Becoming a small-business owner is risky, with demand constantly fluctuating.

Although you can contribute a portion of your personal savings, you want to keep enough set aside for unexpected business and personal costs.

Installment loans

Moving outside the realm of personal contributions is an installment loan through a financial institution. This is one of the most popular funding options small businesses lean toward because of a fixed repayment schedule and flexibility in loan amounts. As a massage business owner, you can either secure a business loan or a personal loan with most qualifying financial institutions, regardless of if you are a new or existing business.

Installment loans are beneficial because they come with fixed interest and principal payments, meaning you know what to expect each month. In addition, you receive an upfront sum that allows you to purchase everything your business needs right away. The downside of installment loans is most lenders work based on your personal or business credit. Moreover, interest can become expensive, but this is a qualifying business deduction.

Line of credit

A line of credit is similar to an installment loan in the sense you will pay interest and the funding is through a financial institution. The main difference is lines of credit give you the ability to continuously take cash payments up to your borrowing limit. Lines of credit also don’t have a set maturity date as the payments are based on how much money you take from your limit.

This funding option is great for businesses that have a strategic growth plan but are missing the necessary capital. For example, if you are planning on updating all equipment and can pay for the items over the next few months, a line of credit serves as a short-term bridge in cash.

Many banks will be more hesitant to give a line of credit to a business that hasn’t opened yet. After you have your first few months of sales, then consider obtaining a line of credit.

Credit cards

Massage business owners often forget about the funding potential of credit cards. Securing a business or personal credit card has never been simpler with many businesses fighting for your application.

Even more incentivizing is most credit cards come with special financing in the first year, such as 0% down for 12 months. Putting all of your startup expenses on a credit card with 0% interest is a beneficial way to save on interest and still get your business going.

If you don’t expect to pay the credit card balance off within the intro period, you should pursue other funding options as credit card interest rates can be stiff, up to 30%. Even if your credit card limit isn’t enough to fund all of the equipment you need, consider adding equipment on as you begin to generate sales.

Government loan

The government is generally willing to help new small businesses get off their feet. After all, small businesses are the driving force behind the economy.

Programs such as those by the Small Business Administration offer loans similar to installment loans. These loans can range anywhere from $10,000 to $100,000 and come with favorable terms, such as the deferment of payments for a set time frame and lower interest percentages.

In some instances, the government gives out grants, which are amounts that don’t need to be repaid. To receive a grant, there must generally be some common good or research behind your business. For example, offering massages to the less fortunate or veterans or researching new massage therapy methods for pain relief.

Outside investors

Another way of funding your massage business is through outside investors. Outside investors include many different categories, from family and friends to angel investors and venture capitalists.

It’s often more difficult to secure angel investors or venture capitalists if you are only planning on keeping operations small. However, if you are looking to franchise your business or are offering a unique product or service, then this may be an option.

Why Small-Business Funding is Useful

Funding is useful for a variety of different reasons. The first reason is that starting a business is cash-intensive. There are long lists of items you need to purchase or documents you need to submit, all of which come with fees. Instead of draining your bank account, funding gives you the money necessary to start operations and make money.

Additionally, a successful business relies on strong cash-flow management. This is all the money your business earns and spends. You want to be earning more money than you are spending, but this isn’t the case with startups. Startup massage businesses will need to spend money on equipment and licenses before they start making money.

Obtaining funding is also beneficial because it reduces your taxable income and stress level. Instead of worrying about whether you’ll be able to buy that new table or launch an advertising campaign, you can rest assured knowing you have the money needed to give your business the best chance of success.

Business failures often happen in the first five years, meaning you want to prioritize creating a successful business from the beginning, without cutting corners.

Becoming a business owner also means you are faced with the task of finding new business opportunities. This could mean joining a marketing campaign with another bodywork business or supporting a local event as a sponsor.

Whatever the case, you don’t want to be restricted in your growth opportunities because of cash. Having the necessary funding ensures you have enough money to hop on any opportunity that comes your way.

Information You Need to Obtain Small-Business Funding

The small-business funding avenue you pursue will dictate which information is required. Additionally, each financial institution or lender has a separate set of criteria they use to evaluate your business. However, you can expect to remit the following information:

• Business plan: This is a document that outlines the basics of your business, from the target customer base to the primary services you offer. Piecing together a business plan that shows transparency in your massage business is vital to impressing lenders.

• Credit: If you are starting a new business, lending will often be based on your personal credit score; however, if you are seeking funding after your business has begun, the lender might want a combination of both personal and business credit.

• Funding amount: Before you go and talk with different lenders, you want a clear picture of how much money you need. Start by putting together a list of your expected costs and then add a percentage on top to account for unexpected expenses.

• Application: For loans through financial institutions, you will generally need to complete and submit an application, then be available for questions.

Take the Initiative

Don’t become discouraged if you aren’t successful with the first lender you reach out to. Massage business owners should shop around to find the right lender with favorable terms.

Securing small-business funding for your new or existing massage business can seem overwhelming. Although there are steps you need to follow, gaining funding is an exciting time as a business owner. It means you are taking the initiative to pursue your passion.

Image of the headshot of author Lozelle Mathai

About the Author

Lozelle Mathai, MBA, CFEI, is a financial accountant with over 18 years of experience in the field of financial management and accounting. She is the owner of Healthy Bodies of Finance, a division of Closing Your Books LLC. The Body of Accounting is an accounting consultancy firm that educates massage and bodywork business owners on how to manage, maintain and understand their business finances, including how to determine the best structure for their business.

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