Doggy Do's Grooming Room, based in Codnor, said it is on the ‘brink of financial ruin’ due to a clause in funding rules that says it can open for 'welfare cases’ and is therefore passed over for help by local authorities.
Welfare cases are where a dog urgently needs to be clipped for the good of its health, such as in the event of a skin condition on matting.
This has left the industry struggling, while other sectors receive support.
Donna Bosworth, of Doggy Do's Grooming Room, said: "We just want to be treated fairly like other small local businesses.
"Of course as dog lovers we would never turn welfare cases away, but this ill-thought-out rule has left us without as much support as other industries.
"Many grooming businesses will not survive if help is not made available, and this will cause a widespread animal welfare problem.
"Coming at a time when so many have bought new puppies of breed types such as the labradoodle, which needs regular grooming, this is a catastrophe waiting to happen.
“This whole situation has been a complete shambles and only added to the extreme stress of the pandemic.
“We had one government department effectively closing us down and another saying carry on but with a tiny fraction of the client base, and no financial support.
“Groomers are falling between the gaps. Restaurants or shops that do deliveries get support yet by trying to care for the nation's dogs we are being ignored. We beg the Government to change their rules."