rows of Huebsch washing machines

The ins and outs of financing for your laundromat

Published On: October 13th, 2020Categories: Laundromats

Congratulations – you’ve made the decision to start your own laundromat! If you’re feeling overwhelmed, know you’re not alone. Starting your own business, especially a cash business like this, can be intimidating. We’re here to walk you through your next step: obtaining financing.

When we say financing, we mean using someone else’s money (typically a bank, credit union, manufacturer-based finance company, etc.) to fund a project. You’ll need to show your dedication to the project by adding some of your own money or property, but for individuals just starting their own business, financing is a great way to hit the ground running if you don’t have the initial funds required to start a business. In the laundry industry, that most often refers to buying the machines, which can cost anywhere from $300 to upwards of $10,000 apiece.

To get you started, we talked with finance expert Jeff Harvey to explain the ins and outs of financing so you can make a more informed decision on how you want to fund your business.


To put it simply, financing is a loan to provide money needed up front to start a project. You’re using a loan to purchase something and will pay back whomever loaned you the money over a set period of time. Opening a laundromat can be fairly expensive, and financing allows investors to get into the business without having to come up with all the funds themselves right away.


When you decide which lender you want to use, you’ll bring them your proposed project plan and your financial documentation. The lender will look at your credit score, credit history, comparable borrowing circumstances (if you’ve borrowed a similar amount of money before and paid it back), payment history, liquidity, reserves, net worth and your debt-to-income ratio to determine how much they think you can realistically afford.

That’s called your pre-approval amount.

Once you get your pre-approval amount, you can start shopping around to create a more complete plan of what you want to do. This includes what types of machines you want to purchase, how many and if you need any ancillary equipment such as a coin machine, vending machines, bill changers, etc. This part may or may not include shopping for a location, too.

After you have that all figured out, you’ll take your final proposal to your lender, who will then hopefully approve your project, and you’ll get the funds to start making purchases to start your business.


Harvey said the first obstacle people typically face when looking into financing is not having a full understanding of where to go. Most are familiar with banks, but they don’t always realize those aren’t the only options out there. Banks don’t know as much about cash businesses, but are still a good option, Harvey said. Manufacturer-based financing that specializes in your industry is also an option as it provides a new perspective and can take a better look at your financial situation and assess your business.

Another barrier people face is not having their financial information available, for example, tax returns, bank statements, personal finance statements or credit applications. Being organized and ready to go is necessary to get the ball rolling, and some are just not prepared or don’t know what to bring.

The last common barrier is exactly what you’d expect – past credit or other financial issues. Harvey said while those situations can present some obstacles, you’d be surprised how often lenders are willing to work with borrowers with past issues. Harvey recommended still applying for financing but come to the table prepared to discuss with the lender what happened, how you overcame it and how you’re better off now.


When you’re starting a laundromat, the most common expense financed is the cost of new equipment. Harvey said in this case, it’s almost never NOT beneficial to finance. Especially for new laundromats because there are so many large up-front costs required to get the business going. He added borrowing from a manufacturer-based lender can provide an added benefit of industry knowledge and even insight into finding a location for your store. The only time Harvey said it might not be beneficial to finance is if you’re bu