SBA rules · SOP 50 10 8.1

Can an SBA loan finance a salon suite business or ghost kitchen?

Salon suite businesses and ghost kitchens are ineligible passive businesses unless they operate strictly on a shared membership model meeting three mandatory conditions.

Quoted from SBA SOP 50 10 8.1Every quote checked word for word

In detail

Membership criteria: To be eligible, revenue must be earned entirely through membership dues rather than rent, customers cannot have an assigned or personalizable space such as a lockable door or dedicated kitchen setup, and the facility must provide upkeep, maintenance, and equipment for customers to drop in and work.
Prohibition on combined models: A business is either fully eligible or fully ineligible, meaning any hybrid structure deriving revenue partly from rent or offering assigned space options is completely ineligible.
Ineligible for all loan purposes: An ineligible business cannot obtain an SBA loan for any purpose, including purchasing or constructing a building for its own use, which prevents the use of general space occupancy or subleasing allowances.
Direct service salons distinguished: Standard barber shops, hair salons, and nail salons providing services directly to the public are eligible, regardless of whether they have employees or contract with individuals to provide services.

The source

What the SOP says

“Shopping centers, office suites (aka salon suites), ghost kitchens, and similar business models that generate income by renting space to accommodate independent businesses that provide services directly to the public are not eligible unless all of the following apply: The revenue is earned through membership dues (not rent); and The business’s customers do not have an assigned space that they know they can return to each time they visit (i.e., customers do not get an office with a lockable door or a particular kitchen setup and the space cannot be personalized); and The business is responsible for upkeep and maintenance and is supplying the equipment necessary for a fully functioning office/kitchen where customers can drop in and begin working. It is acceptable for customers to bring their own tools with them (e.g., kitchen knives). A business is either fully eligible or fully ineligible. If a business has a combined model (part of the revenue is from rent and part from membership dues or they provide for options where there is an assigned space model), it is not eligible.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Passive Businesses 13 CFR § 120.110(c): (lines 406-418)✓ Verified

“Businesses such as barber shops, hair salons, nail salons, and similar types of personal services businesses are eligible, regardless of whether they have employees or contract with individuals to provide the services that the business is providing directly to the public. (See subparagraphs a) and c) above regarding ineligibility of developers and landlords.) An ineligible business cannot obtain an SBA Loan for any purpose, including the purchase or construction of a building for its own use.

SOP 50 10 8.1, Chapter 1: Primary Applicant Eligibility Requirements > Note (lines 432-434)✓ Verified

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