Laundromat financing refers to the various loan products and funding strategies used to purchase, build, or expand a coin-operated or full-service laundry business. The U.S. laundromat industry generates roughly $6.8 billion to $7.1 billion in annual revenue across nearly 19,000 locations, and investors are drawn to the sector for its 20-35% profit margins, 95% business success rate, and recession-resistant demand (Kentley Insights, 2025). Whether you are buying an existing laundromat, building from scratch, or upgrading aging equipment, the right financing structure can mean the difference between a profitable first year and a cash-flow crisis.
This guide breaks down every major financing option available to laundromat buyers and owners, including SBA 7(a) loans, equipment financing, conventional commercial loans, seller financing, and bridge loans. You will find current interest rates, down payment requirements, eligibility criteria, and step-by-step application guidance so you can move forward with confidence. If you are evaluating whether a laundromat is the right investment, use our commercial mortgage calculator to model your monthly payments before you apply.
Laundromat Industry Snapshot (2025-2026)
$6.8B
U.S. Industry Revenue
18,711
U.S. Laundromat Locations
20-35%
Average Profit Margin
95%
5-Year Success Rate
Why Is Laundromat Financing Worth Pursuing in 2026?
Laundromat financing is worth pursuing because the industry combines strong cash flow, low failure rates, and favorable lending conditions. With average annual revenues of $200,000 to $500,000 per location and net profit margins between 20% and 35%, laundromats consistently outperform many small business categories on a risk-adjusted basis (Coin Laundry Association).
Several factors make 2026 a particularly compelling window for financing a laundromat:
- Proven demand - Roughly 21% of American households rely on laundromats, creating a stable customer base that persists through economic cycles (IBISWorld)
- High success rate - Approximately 95% of laundromats remain in business after five years, compared to roughly 50% for small businesses overall (Laundry Boss)
- Favorable ROI - The average laundromat investment produces an unleveraged return of 30-40%, far above the 7-10% typical of passive real estate investments (Martin Ray Laundry Systems)
- Recession resistance - People need clean clothes regardless of economic conditions, which makes laundromat revenue more stable than discretionary retail
Lenders recognize these fundamentals. SBA loans, conventional commercial mortgages, and equipment financing programs are all readily available for laundromat purchases, often with more favorable terms than other small business categories receive.
Laundromat Investment Returns vs. Other Asset Classes
Laundromat (Unleveraged)
Commercial Real Estate
S&P 500 Index
How Much Does It Cost to Open or Buy a Laundromat?
The total cost to open a new laundromat ranges from $200,000 to $500,000 for a standard self-service location, while buying an existing laundromat typically costs between $50,000 and $500,000 depending on size, location, equipment age, and revenue history (Nav, 2026). Understanding these cost ranges is essential before you choose a financing path.
Here is how the major cost categories break down:
Laundromat Startup Cost Breakdown
| Cost Category | New Build | Existing Purchase | Notes |
|---|---|---|---|
| Equipment (washers & dryers) | $100,000-$300,000 | Included in price | Largest single expense |
| Buildout & renovation | $50,000-$200,000 | $0-$75,000 | $200-$300/sq ft for new |
| Lease deposit & first months | $10,000-$30,000 | $5,000-$15,000 | Varies by market |
| Permits & licenses | $2,000-$10,000 | $1,000-$5,000 | State and local fees |
| Insurance (first year) | $3,000-$8,000 | $3,000-$8,000 | General liability + property |
| Working capital reserve | $20,000-$50,000 | $10,000-$30,000 | 3-6 months of expenses |
| Marketing & signage | $5,000-$15,000 | $2,000-$10,000 | Grand opening costs |
| Total Range | $200,000-$500,000+ | $50,000-$500,000 | Depends on size & market |
Equipment is the single largest expense. A full set of commercial washers and dryers for a mid-size location (2,000-5,000 square feet) typically costs $100,000 to $300,000. High-efficiency machines from brands like Speed Queen, Dexter, or Huebsch cost more upfront but reduce water and energy bills by 20-30% over their lifespan.
Buildout and renovation costs run approximately $200 to $300 per square foot for total construction, including plumbing, electrical, HVAC, flooring, and fixtures (RSMeans). For a 3,000-square-foot space, that translates to $50,000 to $200,000 depending on the condition of the existing infrastructure.
Working capital is often underestimated. Plan for at least $20,000 to $50,000 in reserves to cover the first three to six months of lease payments, utilities, insurance, and marketing while the business ramps up.
If you are buying an existing laundromat rather than building new, the purchase price is typically calculated as a multiple of annual net operating income, usually 3x to 5x. A laundromat generating $100,000 per year in net income would therefore be valued at $300,000 to $500,000. Our DSCR calculator can help you determine whether the property's cash flow supports the debt load.
What Are the Best Financing Options for a Laundromat?
The best financing options for a laundromat are SBA 7(a) loans for full acquisitions, equipment financing for machine upgrades, and conventional commercial loans for borrowers with strong credit and collateral. Each option has distinct advantages depending on your situation, credit profile, and the type of investment you are making.
Laundromat Financing Options Compared
| Loan Type | Max Amount | Down Payment | Interest Rate | Term | Time to Close |
|---|---|---|---|---|---|
| SBA 7(a) | $5,000,000 | 10-15% | 10-13.5% | 10-25 years | 60-90 days |
| SBA 504 | $5,500,000 | 10-20% | 6-7% (fixed) | 10-25 years | 60-90 days |
| Conventional Commercial | Varies | 20-30% | 7-11% | 5-20 years | 30-45 days |
| Equipment Financing | $500,000+ | 0-20% | 6-12% | 5-10 years | 1-3 weeks |
| Seller Financing | Negotiable | 10-30% | 6-10% | 5-10 years | 2-4 weeks |
| Bridge / Hard Money | Varies | 20-35% | 10-15% | 6-24 months | 1-2 weeks |
SBA 7(a) Loans
The SBA 7(a) loan is the most popular financing vehicle for laundromat purchases. The program offers up to $5 million in funding, repayment terms of up to 10 years for equipment and 25 years for real estate, and down payments as low as 10% (SBA.gov). The SBA does not lend directly - instead, it guarantees 75-85% of the loan amount through approved lenders, which translates to interest rates that are typically 2-3% lower than conventional financing.
Current SBA 7(a) rates range from approximately 10% to 13.5% for variable-rate loans, based on the prime rate (currently 6.75%) plus an allowable spread of 2.25% to 4.75% depending on the loan amount and term. Fixed-rate SBA 504 loans, which are available for real estate and major equipment purchases, offer rates between 6% and 7% (NerdWallet, 2026).
To learn more about using SBA financing for commercial property acquisitions, read our guide on SBA loans for commercial real estate. You can also explore our full SBA loan programs to see current terms.
Equipment Financing
Equipment financing lets you spread the cost of washers, dryers, and ancillary systems over 5 to 10 years, with the equipment itself serving as collateral. This means you may qualify with a lower credit score and less cash upfront than a full business acquisition loan requires. Fixed rates typically range from 6% to 12%, and many manufacturer financing programs - like those from Huebsch and LaundryLux - offer promotional terms with no down payment (Huebsch Finance).
Equipment financing is ideal when you are upgrading machines in an existing laundromat or adding capacity, but it does not cover real estate, working capital, or buildout costs.
Conventional Commercial Loans
Conventional commercial loans from banks and credit unions offer competitive rates for borrowers with strong credit (typically 700+), established business history, and collateral. Down payments usually range from 20% to 30%, and repayment terms run 5 to 20 years. Interest rates for conventional commercial loans currently fall between 7% and 11%, depending on the borrower's profile and the lender.
These loans close faster than SBA loans (typically 30-45 days versus 60-90 days) and come with fewer documentation requirements, making them a good fit for experienced operators.
Seller Financing
Seller financing occurs when the current laundromat owner acts as the lender, allowing you to make payments directly to them over an agreed term. This option is particularly valuable for first-time buyers who may not qualify for traditional bank financing. Down payments are negotiable but typically range from 10% to 30%, with interest rates between 6% and 10% and terms of 5 to 10 years.
Bridge Loans and Hard Money
For time-sensitive acquisitions or properties that do not yet qualify for conventional financing, bridge loans and hard money loans provide short-term capital (6-24 months) with faster closings. Rates are higher (10-15%), but these loans can help you secure a deal while you arrange permanent financing.
Typical Down Payment by Loan Type
Equipment (Vendor)
0
SBA 7(a)
10
SBA 504
15
Seller Financing
15
Conventional
25
Bridge / Hard Money
30
What Credit Score and Down Payment Do You Need?
Most laundromat lenders require a minimum credit score of 650-680 for SBA and conventional loans, though some equipment financing and microloan programs accept scores as low as 575. Down payment requirements range from 0% for vendor-financed equipment to 30% for conventional commercial mortgages (Biz2Credit). Your credit score, down payment amount, and business experience work together to determine which financing options are available and at what rates.
Key Qualification Benchmarks
If you are new to commercial lending, our guide on how to get a commercial loan with no experience explains how to strengthen your application even without a track record in the laundromat industry.
Here are the key qualification benchmarks:
- Credit score - 680+ opens the widest range of options at the best rates. Scores between 620 and 680 can still qualify for SBA loans and equipment financing. Below 620, you are limited to alternative lenders, hard money, or seller financing.
- Down payment - Budget for 10-20% for SBA loans, 20-30% for conventional loans, and 0-10% for equipment financing. Our guide on commercial loan down payment requirements covers this topic in depth.
- DSCR - Lenders typically require a debt service coverage ratio (DSCR) of 1.20x to 1.25x, meaning the laundromat's net operating income must be at least 20-25% higher than the annual loan payments. DSCR is the single most important metric in commercial loan underwriting (CREFCOA).
- Business plan - A detailed business plan with financial projections, market analysis, and management experience is required for SBA loans and strongly recommended for all other loan types.
- Time in business - Startups face more scrutiny. Buying an existing laundromat with documented revenue history is significantly easier to finance than a ground-up build.
How Does the Laundromat Loan Application Process Work?
The laundromat loan application process typically takes 30 to 90 days from initial application to funding, depending on the loan type and lender. SBA loans require the most documentation and take the longest (60-90 days), while equipment financing and bridge loans can close in as little as 2-4 weeks (SBA 7(a) Loans).
Laundromat Loan Application Timeline
Pre-Qualification
Contact 2-3 lenders, discuss project scope and credit profile
Week 1
Application & Docs
Submit formal application with tax returns, business plan, and financials
Weeks 2-4
Underwriting
Lender reviews financials, orders appraisals, evaluates DSCR
Weeks 4-8
SBA Approval
For SBA loans: package submitted to SBA for guarantee approval
Weeks 6-10
Closing & Funding
Sign documents, pay closing costs (2-5%), receive funds
Weeks 8-12
Here is what to expect at each stage:
Step 1: Pre-qualification (Week 1) - Contact 2-3 lenders to discuss your project, credit profile, and financing needs. Most lenders can provide a preliminary indication of loan amount, rate, and terms within a few days.
Step 2: Application and documentation (Weeks 2-4) - Submit your formal application along with supporting documents. For SBA loans, this includes personal and business tax returns (3 years), a detailed business plan, personal financial statements, a purchase agreement or letter of intent, equipment quotes, and lease agreements.
Step 3: Underwriting (Weeks 4-8) - The lender reviews your financials, orders appraisals, and evaluates the deal. This is where your DSCR, credit score, and collateral are scrutinized. For SBA loans, the lender also submits the package to the SBA for guarantee approval.
Step 4: Closing (Weeks 8-12) - Once approved, you sign loan documents, pay closing costs (typically 2-5% of the loan amount), and receive funding. Equipment financing and conventional loans often close 2-4 weeks faster than SBA loans.
Get pre-qualified for laundromat financing today - contact our lending team.
What Revenue and Cash Flow Should You Expect?
A well-run self-service laundromat generates $15,000 to $30,000 per month in gross revenue, with net profit margins of 20-35% after operating expenses (ProjectionHub). Full-service laundromats that offer wash-and-fold and pickup/delivery services can generate significantly more. These cash flow figures are critical for determining how much financing you can support.
Here is a realistic monthly cash flow model for a mid-size laundromat:
Monthly Cash Flow Model: Mid-Size Laundromat
| Category | Monthly Amount | Annual Amount | % of Revenue |
|---|---|---|---|
| Gross Revenue | $22,000 | $264,000 | 100% |
| Rent / Lease | ($4,000) | ($48,000) | 18% |
| Utilities (water, gas, electric) | ($3,500) | ($42,000) | 16% |
| Labor (if applicable) | ($2,500) | ($30,000) | 11% |
| Equipment Maintenance | ($1,000) | ($12,000) | 5% |
| Insurance | ($500) | ($6,000) | 2% |
| Supplies & Misc | ($500) | ($6,000) | 2% |
| Loan Payment (SBA at 10%) | ($3,200) | ($38,400) | 15% |
| Net Cash Flow | $6,800 | $81,600 | 31% |
Revenue diversification is increasingly important. Top-performing laundromats now generate 20-40% of their revenue from ancillary services:
- Wash-and-fold - Priced at $1.25 to $2.00 per pound, this service can add $5,000 to $15,000 per month in revenue
- Pickup and delivery - A premium service that can increase total revenue by 20-40%
- Vending and ATM - Modest but consistent income of $500 to $2,000 per month
- Commercial accounts - Contracts with hotels, gyms, and salons for regular laundry processing
The payback period for most laundromat investments is 3 to 5 years, assuming stable operations and positive cash flow from month one (The Laundry Boss). This timeline makes laundromats attractive to both first-time investors and seasoned operators looking for strong, predictable returns.
How Do You Choose Between SBA, Conventional, and Equipment Loans?
Choose an SBA loan if you want the lowest down payment and longest repayment terms, a conventional loan if you have strong credit and want to close quickly, and equipment financing if you only need to fund machines. The right choice depends on your specific situation, and many laundromat purchases use a combination of two or more financing types.
Which Loan Type Is Right for You?
SBA 7(a) Loan
Conventional Commercial
Equipment Financing
Seller Financing
Here is a decision framework:
Choose SBA 7(a) if:
- You are a first-time buyer or have limited capital
- You want to finance the full acquisition (real estate, equipment, and working capital) under one loan
- You can wait 60-90 days for closing
- You need the lowest possible down payment (10%)
Choose conventional if:
- You have a credit score of 700+ and 20-30% down payment
- You want to close in 30-45 days
- You have an existing banking relationship
- You prefer simpler documentation requirements
Choose equipment financing if:
- You are upgrading or replacing machines in an existing location
- You want to preserve cash for other business needs
- You can qualify based on equipment value alone
- You want $0 down through a manufacturer program
Choose seller financing if:
- You do not qualify for bank financing
- The seller is motivated and willing to carry a note
- You want flexible, negotiable terms
- You can make a 10-30% down payment
For acquisitions that involve both real estate and equipment, our acquisition loan programs can help you structure a deal that covers the full purchase price.
Talk to a lending specialist about the best financing structure for your laundromat deal.
What Are Common Mistakes to Avoid When Financing a Laundromat?
The most common mistakes in laundromat financing are underestimating startup costs, skipping due diligence on equipment condition, and choosing the wrong loan product for the deal structure. These errors can turn a profitable investment into a cash-flow problem within the first year.
Common Laundromat Financing Mistakes
Here are the critical mistakes to watch for:
1. Underestimating total costs - Many first-time buyers focus on the purchase price and forget about buildout, permits, utility deposits, insurance, and working capital. Budget 15-20% above your initial estimate to cover unexpected expenses.
2. Ignoring equipment condition - Used commercial washers and dryers have a lifespan of 10-15 years. If you are buying a laundromat with aging equipment, factor replacement costs ($100,000-$300,000) into your financing plan.
3. Skipping the DSCR analysis - If the property's cash flow does not support a 1.25x DSCR, you will either be denied financing or forced into higher-rate alternatives. Run the numbers before you make an offer.
4. Applying to only one lender - Interest rates and terms vary significantly between lenders. Always get quotes from at least 3 lenders and compare total cost of capital, not just the interest rate.
5. Choosing the wrong loan product - Using a high-rate bridge loan for a long-term hold, or an equipment loan when you also need working capital, creates unnecessary cost and complexity.
6. Neglecting the lease - If you are financing a laundromat but not the real estate, the lease term must exceed the loan term. Lenders will not fund a 10-year loan on a property with only 5 years remaining on the lease.
What Are the Most Frequently Asked Questions About Laundromat Financing?
Can you get a loan to buy a laundromat with no money down?
Yes, but options are limited. Equipment manufacturer financing programs from companies like Huebsch and Speed Queen sometimes offer $0 down promotions. Seller financing can also be negotiated with minimal down payment. However, most bank and SBA loans require 10-30% down. The lower your down payment, the higher your monthly payments and the longer your payback period.
What credit score do you need to finance a laundromat?
For SBA loans, most lenders require a minimum credit score of 650-680. Conventional commercial loans typically require 700+. Equipment financing may be available with scores as low as 600, and SBA microloans accept scores as low as 575. Higher scores unlock lower rates and better terms.
How long does it take to get approved for a laundromat loan?
Timelines vary by loan type. Equipment financing can close in 1-2 weeks. Conventional commercial loans typically take 30-45 days. SBA 7(a) loans require 60-90 days from application to funding. Having your documentation ready before you apply can reduce these timelines significantly.
Are laundromats a good investment?
By most financial metrics, yes. Laundromats offer 20-35% profit margins, a 95% success rate over five years, average ROI of 30-40% (unleveraged), and a payback period of 3-5 years. However, profitability depends on location, equipment quality, management, and local competition.
Can you use an SBA loan to buy a laundromat?
Yes. The SBA 7(a) loan is the most common financing tool for laundromat acquisitions. It covers the purchase price, equipment, working capital, and even real estate if you are buying the building. Maximum loan amount is $5 million with terms up to 25 years for real estate and 10 years for equipment.
What is the average down payment for a laundromat?
The industry standard is 20-30% for conventional financing. SBA loans offer lower down payments of 10-15%. Seller financing and equipment leases may require less. On a $300,000 laundromat purchase, expect to bring $30,000 to $90,000 in cash depending on the financing structure.
How much does laundromat equipment cost?
A full set of commercial washers and dryers for a mid-size laundromat costs $100,000 to $300,000. Individual commercial washers range from $2,000 to $20,000 depending on capacity, and commercial dryers range from $2,000 to $10,000. High-efficiency machines cost more upfront but reduce utility bills by 20-30%.
What DSCR do lenders require for laundromat loans?
Most commercial lenders require a minimum DSCR of 1.20x to 1.25x for laundromat financing. This means the property's annual net operating income must be at least 120-125% of the annual debt service. A higher DSCR (1.30x or above) will improve your chances of approval and may qualify you for better rates.
Ready to finance your laundromat? Get a free consultation with our commercial lending team.
Sources: Kentley Insights (2025 Laundromat Industry Report), IBISWorld (U.S. Laundromat Industry Data), Coin Laundry Association, SBA.gov, NerdWallet (2026 SBA Loan Rates), ProjectionHub (Laundromat Financial Statistics), The Laundry Boss (Laundromat ROI Guide), Martin Ray Laundry Systems, Biz2Credit (Laundromat Financing Guide), CREFCOA (Commercial Loan Debt Ratios)