How to Buy a Laundromat With an SBA Loan
A laundromat is a room full of machines bolted to someone else's floor. The deal turns on the lease, the age of the equipment, and whether the revenue the seller quotes can be proven when much of it arrives as coins and app payments.
See if your deal qualifies →SBA FOIA 7(a) loan-level data, NAICS 81231*, FY2021 through FY2026.
What you need to put in
Ten percent of the total project cost is the SBA minimum for buying a business, and the project cost is everything the loan pays for: the purchase price, the closing costs, and the working capital you are borrowing to get through the first months.
Half of that ten percent can be a seller note, which is the structure most buyers are hoping for. The catch since June 2025 is that the note has to be on full standby for the entire life of the SBA loan, meaning no principal and no interest paid to the seller for ten years. A note on two year standby, which used to qualify, no longer counts toward your injection. The other five percent has to be real money, and the lender will trace where it came from.
On rate, an acquisition loan of this size prices near Prime plus 2.75 percent, with Prime plus 3.0 percent the SBA ceiling above $350,000. Ten year term, no balloon, and no prepayment penalty at that maturity. If real estate is part of the purchase the term stretches and the arithmetic changes.
What to diligence in a laundromat
The generic acquisition checklist covers the financials. These are the ones specific to this sector, and they are where deals here actually go wrong.
The lease is the business
Washers are bolted down, plumbed and vented into the building, and moving them is a rebuild. If the remaining lease term, plus renewal options only you can exercise, is shorter than the loan, the deal has a problem. SBA requires the lease to run at least as long as the loan when leasehold improvements, or equipment attached to the leased space, make up $500,000 or 30% of the collateral, whichever is less. Get the landlord's consent to assignment, and any extension you need, agreed before you sign the purchase agreement.
Prove the revenue from more than one direction
Coin, card, app and wash-dry-fold revenue arrive through different channels. Reconcile each one to the bank deposits and the tax returns. The water and gas bills are a useful cross-check, because every cycle uses water: if the bills are flat while revenue climbs, ask why. Cash that never reached the tax return is not income a lender will count.
Machine ages decide your first years of ownership
Get a list of every washer and dryer with make, model, capacity and year installed. Ask when each was last repaired and which parts are hard to find. A store full of machines near the end of their life needs replacement money, and the price should reflect it. Card and app payment systems may carry monthly fees and contracts that pass to you, so read those too.
Dry cleaning history triggers the strictest environmental rule
Laundries are on SBA's list of environmentally sensitive industries when dry cleaning has ever been done on the site. If the lender takes a lien on the real estate and dry cleaning solvents were used there, now or in the past, SBA requires a Phase I environmental assessment followed by a Phase II. Drop-off dry cleaning that is sent to another plant is different, so find out exactly what has happened on the premises.
Wash-dry-fold and commercial accounts are a second business
Drop-off and pickup service, and accounts with gyms, salons or short-term rentals, can be a large share of revenue. They depend on staff and on a few customers. Ask for revenue by service line and the largest accounts by name.
Licensing and regulation in this sector vary by state and change. This is a general description, not advice on your deal, so check anything you are going to rely on against your own state's current rules.
What the lender will ask you about
Beyond the usual credit questions. Have these answered before the file goes in and you save a round trip.
- ·How old is each washer and dryer, and what will replacement cost over the loan term?
- ·How long does the lease run including your renewal options, and will the landlord consent to assignment?
- ·How does each revenue channel (coin, card, app, wash-dry-fold) tie to the deposits and the tax returns?
- ·Has dry cleaning ever been done on the site?
Who actually lends on laundromats
The Huntington National Bank has approved more loans in this sector than anyone else since FY2021, at an average of $349K. A lender who has done dozens of these already knows what the licence transfer looks like, which is worth more than a slightly better rate.
| # | Lender | Loans | Total Volume | Avg Loan |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 58 | $20.3M | $349K |
| 2 | Bank of Hope | 38 | $35.7M | $940K |
| 3 | Manufacturers and Traders Trust Company | 36 | $8.4M | $235K |
| 4 | Readycap Lending, LLC | 35 | $59.4M | $1.7M |
| 5 | TD Bank, National Association | 28 | $4.4M | $158K |
| 6 | Hanmi Bank | 25 | $25.8M | $1.0M |
| 7 | Newtek Bank, National Association | 21 | $11.6M | $554K |
| 7 | Metro City Bank | 21 | $32.0M | $1.5M |
Source: SBA FOIA 7(a) loan-level data, NAICS 81231*, FY2021 through FY2026. Lenders with fewer than 3 approved loans in the sector are excluded.
Full laundromats lending data →Busiest states for laundromats
Buying a laundromat: common questions
Can I buy a laundromat with an SBA 7(a) loan?
Yes. A laundromat is an operating business, and the loan can cover the business, the equipment, working capital and the building if it is part of the sale. Expect a down payment of at least ten percent of the total project cost, of which up to half can be a seller note on full standby.
Is an unattended laundromat a passive business?
Not because it runs without staff for part of the day. SBA rules out businesses structured as a stand-alone asset run on a passive basis, and businesses where a management company has sole discretion over operations. If you set the prices, look after the machines, handle the money and answer to customers, you are running it. If a management company would run it for you, raise that with the lender early.
Can the loan pay for new machines?
Yes. Equipment is an eligible use of 7(a) proceeds, so replacement machines can be part of the project at closing. Get quotes before you apply so the lender sizes the loan around them.
How much does it cost to buy a laundromat?
Across the sector, the average approved SBA 7(a) loan is $767K, taken over 994 loans since FY2021. That is the loan, not the purchase price: the loan usually also carries closing costs and working capital, and the buyer puts in at least ten percent on top. Use it as a sense of scale rather than a quote.
How long does an SBA loan to buy a laundromat take?
Sixty to ninety days from a complete file is the honest range for a straightforward acquisition, and it is the FILE that sets the clock rather than the bank. A lender with SBA Preferred Lender status approves in house instead of waiting on SBA review, which takes weeks out. Anything that needs a third party, an appraisal, an environmental report, a licence transfer, runs on its own schedule.
What can the loan actually pay for?
The purchase price of the business, the closing costs, working capital for the transition, and the real estate if you are buying the building too. A 7(a) loan for goodwill is typically a ten year term with no balloon and no prepayment penalty. Add owner-occupied real estate and the term stretches, up to twenty five years where the property is the majority of the project.
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