This is some text inside of a div block.

Laundromat Financing: How to Get a Laundromat Business Loan

This is some text inside of a div block.


Laundromat Financing: How to Get a Laundromat Business Loan

This is some text inside of a div block.

What is laundromat financing?

Laundromat financing is a type of lending that helps fund a laundromat business or allows you to equip a laundromat with the necessities to operate or grow. As an umbrella term, it explains a variety of financing products like traditional banking loans, financing for equipment, working capital loans, SBA 504 loans and more. Keep reading as we explore laundromat financing options, how it works, and how to get a laundromat business loan.

How to finance a laundromat with bad credit

There are many ways to finance a laundromat, even outside of acquiring a business loan. You may want to consider all your options, especially with bad credit.

  1. Consider Alternative Lenders: Explore financing from non-traditional lenders like online companies, credit unions, or community financial institutions. You may improve your chances by reviewing all your options.
  2. Co-Signer: Consider having someone with better credit co-sign your loan. This should improve your ability to acquire a loan, especially at a better interest rate.
  3. Asset-Based Lending: Use assets as collateral for a business loan. Offering collateral to lenders improves your changes of getting a loan.
  4. Merchant Cash Advances: Look into cash advances against future sales, but be aware of high costs.
  5. Government Programs: Research government-backed loans or grants for small businesses.
  6. Leasing Equipment: Lease instead of buying equipment to reduce upfront costs.
  7. Vendor Financing: Check if equipment vendors offer financing options.
  8. Seller Financing: Negotiate with the seller of the laundromat for partial financing

Consider reviewing your options before moving forward with a traditional business loan. If you are looking for a business term loan make sure you review all the terms of the agreement before signing.

How does laundromat financing work?

If you’re considering financing a new or existing laundromat, you should first determine how much money you need to borrow and what kind of lending product would work best for you. From there, you should set yourself up for success and increase your chance of qualifying. While we’ve summarized this into two sentences, as you probably already know there’s a lot that goes into it. Turn to mySMBscore for personalized insights and recommendations that can put you on the path to finding a competitive business loan. 

At mySMBscore you can check your business credit score and view personalized loan offers all with no commitment. Unlock a new perspective on the financial position of your business that will allow you to better understand what you can qualify for. Once you’ve confirmed you’re green light ready to apply for a loan, shop offers and get pre-qualified. The specifics on how the loan is funded will vary depending on the type of loan, hence why we recommended you understand your needs prior to diving it. For example a business line of credit will offer a revolving line of credit that you can draw on as needed while a business term loan can provide a lump sum of cash repaid in fixed installments. Furthermore, some business loans will have more restrictions than others.

How profitable is owning a laundromat?

There are a lot of factors that go into the profitability of a laundromat, like location, equipment, and operating costs. The more modern and energy-efficient your laundromat is, the more opportunity you’ll have to lower your bottom line and generate a larger profit. As with any business, profitability will come down to the operating and business decisions. 

How are laundromat acquisitions financed?

Acquiring a laundromat is very similar to any other type of business acquisition. The type of financing you apply for should depend on whether you’re acquiring real estate or just the business. 

You can seek out several different types of financial products that can help you acquire a laundromat, like: 

  • Seller financing: In some cases, the current owner of a laundromat may be willing to finance the sale, allowing the buyer to make payments over time.

  • Commercial real estate loans: If the laundromat includes real estate, such as a building or land, a commercial real estate loan may be used to finance the acquisition.

  • Equipment financing: This option allows you to finance the purchase of laundry equipment, such as washers and dryers, through a loan or lease agreement.

  • Small Business Administration (SBA) loans: The SBA offers various loan programs designed to help small businesses secure financing, including loans specifically for laundromats.

  • Term business loans: Term loans from banks, credit unions, online lenders, and other financial institutions can be used to finance a laundromat startup or acquisition.

As you explore financing options, make sure you consider business finances and loan costs, as well as what your business is eligible for. Before applying it’s important to understand your business and personal credit score. We understand you may be more familiar with your personal credit score than your business credit score, so let’s start there. To access a business credit score, visit mySMBscore and we’ll provide insights and compartmentalize the score to help you understand the businesses financial position. From there we can help you identify ways to improve eligibility and or connect with lenders that can offer a business loan.

How much money do you need to invest in a laundromat?

On average, most laundromats will require between $200,000 and $500,000 to open, but this can vary greatly depending on a variety of factors like location, scale of operation and more. Here are a few things you’ll likely need to purchase when you’re investing in a laundromat. 

  • Equipment: You’ll need to either purchase or lease the washers, dryers and other equipment to get the laundromat started.
  • Real estate: Whether you’re leasing a space or plan to purchase a building, make sure to factor in the real estate costs of the investment. 
  • Operating expenses: Don’t forget costs like utilities, maintenance, and staffing.

How can I start a laundry business with no money?

Starting a laundromat business with no money or limited cash can be challenging, but a dedicated business owner will always find a way. To start a laundromat with no money you can look into financing, reach out to friends and family members willing to loan money or invest, or work with investors to grow the business venture. You may also be able to turn to the SBA for a laundromat business loan.

Can a laundromat make you a millionaire?

Just like you, we hope so! Like any business, growth depends fully on your strategies, financial decisions, and sometimes plain luck. There are countless stories of entrepreneurs starting laundromats, and over time, they grow to become millionaires thanks to their investments and well-though business decisions. 

What percentage of laundromats fail?

Laundromats have an incredibly high success rate, with almost 95% of laundromats succeeding. This makes them a great investment choice and a smart financial decision with such a high success rate.

How hard is it to run a laundromat?

From maintenance issues to acquiring customers, running a laundromat has its fair share of challenges. But, compared to other businesses, it can be incredibly rewarding and easy to start. If you’re considering starting a laundromat, do your research into business operations and the costs associated to ensure you feel prepared to take on running a laundromat. 

What to consider about laundromat financing 

As with any debt, it’s important to weigh all the pros and cons before taking on debt to finance a laundromat. Some things you should consider are: 

  • Do you have experience running a business? Most lenders will want to see you have experience running a business of some sort or have a very strong credit history. 
  • Are you qualified for financing? If you don’t have the cash you need to start a laundromat, you’ll need to obtain financing to get the business going. This will require you to get qualified for financing through a bank or financial institution. To position your business to qualify, take advantage of mySMBscore. 
  • Can you afford to repay your monthly loan? Taking out debt to start a business can backfire quickly if you’re not prepared to make monthly payments. Ensure you’re only borrowing what you can afford — otherwise, there can be significant consequences to your business and personal credit.

What are the types of laundromats that can be financed?

There are a few key types of laundromats that you can decide to finance when you’re starting your laundromat business. One of the first differences between laundromats is staffing. There are fully-staffed laundromats that have someone on-site during the hours of operation. Or, you can save money by running an unattended or self-serviced store. 

Additionally, you’ll have to decide if you want to include coin-operated machines or opt for fully digital payment machines. While coin machines can be a dependable option for a wide range of income ranges, card laundromats allow for ease of payment without needing coins. 

No matter what business model you opt for, make sure you check with your lender or bank to confirm they provide financing for that particular type of laundromat business. 

What are my laundromat business loan options?

As you prepare to apply for financing for your laundromat business, it can be helpful to understand all of your financing options and how they will impact your business. Here are some of the common types of laundromat business loans you can get. 

  • SBA loans: The Small Business Administration (SBA)  offers several different loan programs to help small businesses secure financing. SBA loans often have favorable terms, making them a great option for entrepreneurs looking to get laundromat financing. Find an SBA approved lender to apply.

  • Equipment financing: This type of loan or lease agreement is specifically developed to finance the purchase of laundry equipment. It can help you keep more cash in the bank and offer tax benefits.

  • Business Line of Credit: A business line of credit provides flexible access to funds, allowing laundromat owners to draw on the credit line as needed for equipment upgrades, repairs, or other expenses.

You can use mySMBscore to explore all of your laundromat financing needs. After entering a bit of business information, we’ll show you how your business credit score impacts the financing options you’re qualified for, as well as ways to improve it. 

How do I qualify for a laundromat business loan?

While each lender and loan product will have specific requirements, there are a few standard requirements you should meet at a minimum. This includes: 

  • Good personal and business credit scores
  • Experience running a business
  • A clear business plan
  • Balance sheet or financials 

Make sure you closely review all the requirements for the laundromat financing you’re interested in so you can confirm you’re eligible before compiling your application. 

How do I apply for a laundromat business loan?

By following a few simple steps, you can easily apply for a laundromat business loan and get the funding you need to start your new business. 

  1. Consider your needs (How much do you need to borrow? What do you need the funds for? How quickly can you repay them?)
  2. Check your business credit score (Visit mySMBscore to get started)
  3. Compare offers (Again, mySMBscore can help)
  4. Choose an offer and finalize the approval
  5. Receive funding, repay the loan as agreed, and repeat the cycle as needed

Top Loans