How to Get a Business Loan for Your Laundromat in 5 Steps

Running a laundromat business often requires significant upfront and ongoing capital. From purchasing commercial washers and dryers to covering rent, utilities, build-out costs, and working capital, access to reliable funding is essential to open, maintain, and scale your operation.

Fortunately, there are business loan options tailored specifically for laundromat owners. Whether you’re launching a new location, upgrading equipment, or managing cash flow, the right financing can help you stay efficient and grow confidently.

In this guide, we’ll cover five key steps to help you secure a laundromat business loan.

1. Determine Your Financing Needs

Before applying for a laundromat business loan, the first step is to clearly outline what you need the funds for. Laundromats typically have a variety of expenses that require significant capital. These can include purchasing or upgrading commercial washers and dryers, covering build-out or renovation costs for your facility, paying rent and utilities, or maintaining enough working capital to keep operations running smoothly.

By identifying your exact financing needs up front, you’ll have a clearer idea of how much money to borrow and what type of loan product is best suited for your situation. For example, equipment financing may be ideal if your primary expense is purchasing new washers and dryers, while a working capital loan may be more suitable for covering payroll, rent, or utility costs.

Having a detailed breakdown of how you’ll use the funds will not only help you avoid borrowing more than you need, but it will also show lenders that you’ve carefully planned for the future of your laundromat business.

Common Reasons for Laundromat Business Loans

Laundromat owners face a variety of expenses depending on the size of their business, the condition of their equipment, and their plans for growth. Here are some of the most common uses for financing:

Equipment and Machines

Purchasing or upgrading commercial washers and dryers requires a large upfront investment. Financing helps you spread out the cost of equipment while ensuring your laundromat stays modern, efficient, and attractive to customers.

Facility Build-Out or Renovation

Opening or expanding a laundromat often involves significant construction and utility upgrades. A loan can help cover build-out costs, plumbing, electrical work, and renovations to create a reliable, customer-friendly space.

Rent and Utilities

Laundromats rely heavily on water, gas, and electricity, which can make operating expenses substantial. Financing provides support to manage high utility bills and rental costs, especially during slower business cycles.

Working Capital

Day-to-day expenses like payroll, cleaning supplies, routine maintenance, and marketing can add up quickly. Access to working capital loans or lines of credit ensures you have the funds to keep operations running smoothly.

Expansion and Upgrades

As your laundromat grows, you may want to add more machines, introduce drop-off or wash-and-fold services, or open additional locations. Business loans make it possible to scale your operations without draining your cash reserves.

2. Types of Laundromat Business Loans

Laundromat owners have access to a variety of financing options designed to support equipment purchases, facility improvements, and day-to-day expenses. Choosing the right loan type will depend on your specific goals and financial situation.

Equipment Financing

Equipment financing is ideal for purchasing commercial washers, dryers, and other laundry equipment. The machines themselves often serve as collateral, making qualification easier.

• Loan Amounts: Up to 100% of the equipment’s value
• Uses: Washers, dryers, folding stations, payment systems, or other laundry equipment
• Terms: Typically 3 to 7 years, depending on the expected lifespan of the equipment

SBA 7(a) Loans

SBA 7(a) loans are government-backed loans that offer competitive interest rates and longer repayment terms, making them a strong option for laundromat owners with larger funding needs.

• Loan Amounts: Up to $5 million
• Uses: Facility build-outs, working capital, refinancing, or equipment purchases
• Terms: Up to 10 years for working capital or equipment; up to 25 years for real estate

Term Loans

Term loans provide a lump sum of capital that’s repaid over a fixed schedule. They’re a good choice for laundromat projects with clear costs and timelines.

• Loan Amounts: Varies based on credit, revenue, and lender requirements
• Uses: Renovations, marketing campaigns, technology upgrades, or adding services like wash-and-fold
• Terms: Typically 1 to 10 years, with fixed or variable interest rates
  

Business Line of Credit

A business line of credit gives laundromat owners flexible access to funds that can be drawn as needed. This is especially useful for managing recurring expenses or seasonal fluctuations.

• Credit Limits: Based on annual revenue and business credit
• Uses: Payroll, rent, utilities, maintenance, or short-term cash flow gaps
• Terms: Revolving credit; interest is only paid on the amount drawn

3. Assess Your Eligibility

Understanding the criteria lenders use to evaluate laundromat loan applications can help you prepare stronger documentation and improve your chances of approval. While requirements vary depending on the lender and loan type, most will look closely at your financial history and overall business profile.

Credit Score

Both personal and business credit scores are important factors. A higher score increases your likelihood of approval and may help you secure more favorable loan terms. Traditional lenders often prefer scores above 680, while alternative lenders may work with lower scores.

Time in Business

Lenders usually prefer laundromats with at least one to two years of operating history. If you’re opening a new location, you may still qualify for certain loan types if you can provide a strong business plan and financial projections.

Annual Revenue

Your laundromat’s revenue is a key indicator of repayment capacity. Many loan programs set minimum revenue requirements, often ranging between $100,000 and $250,000 annually.

Profit Margins and Cash Flow

Because laundromats face high fixed costs such as utilities and rent, lenders will review your margins and cash flow carefully. Demonstrating consistent profitability will strengthen your application.

Collateral (When Required)

For larger loans or equipment financing, you may be asked to provide collateral such as laundry machines, property, or other business assets. Offering collateral can improve your approval odds and loan terms.

4. Choose the Right Lender

Once you’ve identified your financing needs and assessed your eligibility, the next step is choosing a lender that understands the unique requirements of running a laundromat. From traditional banks to alternative financing companies, each option has its advantages.

Traditional Banks

Banks typically offer low interest rates and long repayment terms, making them a good fit for established laundromats with strong credit and financial history. However, approval can take several weeks and often involves strict qualifications and extensive paperwork.

Online and Alternative Lenders

Alternative lenders provide faster application processes and more flexible approval criteria. They’re often a great option for laundromat owners who need quick access to working capital, funds for equipment upgrades, or who don’t meet the strict requirements of traditional banks.

Industry-Specific Lenders

Some lenders, such as SBG Funding, focus on financing small businesses across industries and offer specialized loan products for equipment purchases, renovations, or working capital. These lenders also tend to understand the high utility costs, cash flow challenges, and capital requirements unique to laundromats.

5. Gather Your Documents and Apply

Once you’ve chosen the lender and loan product that fits your laundromat business, the final step is to prepare your application. Submitting complete and accurate documentation can speed up the process and increase your chances of approval.

Common Documents You’ll Need

Most lenders will request some or all of the following materials:

• Business Bank Statements: Typically the most recent 3 to 6 months
• Tax Returns: Personal and business returns from the past 1 to 2 years
• Profit and Loss Statement: A detailed view of your laundromat’s income and expenses
• Balance Sheet: An overview of your current assets, liabilities, and equity
• Equipment Quotes or Invoices: Required if you’re financing washers, dryers, or other machines
• Business License or Permits: Proof that your laundromat is licensed and compliant with local regulations
• Personal Identification: Such as a government-issued ID

In some cases, lenders may also request a business plan or financial projections, especially if you’re opening a new laundromat location or adding new services.

Funding timelines can vary by lender. Alternative lenders may approve and fund within days, while banks can take several weeks. Be prepared to answer follow-up questions and review all loan terms carefully before signing.

Flexible Funding for Laundromat Businesses from SBG Funding

Whether you’re upgrading equipment, renovating your facility, or expanding to a new location, SBG Funding offers tailored term loan solutions designed for laundromat owners. Our fast and flexible financing helps you invest in washers, dryers, utilities, and working capital without slowing down operations.

Why Choose SBG Funding?

• Quick Approvals: Get a decision in as little as 24 hours.
• Tailored Loan Options: Use funds for equipment, build-outs, utilities, or expansion.
• Transparent Terms: No hidden fees and competitive rates.

How to Apply

1. Apply Online: Complete our short application in minutes.
2. Get a Fast Decision: We’ll review your request and respond within 24 hours.
3. Receive Funding: Approved funds can be in your account as soon as the same day.

Applying won’t affect your credit score. Get the capital your laundromat business needs without the delays.