A Comprehensive Guide to Financing Your Laundromat Business: Cashing in on Clean Clothes

Laundromats can be incredibly lucrative and scalable business ventures. They have proven to be recession-resistant, providing a sense of financial security to you as a business owner. Additionally, the business model is relatively straightforward, and the demand for laundry services continues to grow in urban areas with limited space for in-home appliances. With strong potential for consistent cash flow and a high return on investment, laundromats have become a desirable option for first-time entrepreneurs and seasoned business owners.

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Venturing into the laundromat industry requires considerable financial planning and investment. From acquiring equipment and securing a prime location to getting permits and licenses, the initial costs of starting a laundromat business can be significant. You also have to consider the ongoing expenses and maintain a healthy cash flow in order to pave the way for long-term success.

The financial planning that goes into starting a laundry business can be overwhelming but it’s totally doable! Keep reading to learn all the need-to-know aspects of laundromat financing, valuable insights into the initial costs, funding options, how to hurdle red tape, and financial management techniques that are critical to the success of your venture. Whether you’re just starting to dip your toes into entrepreneurship or you’re experienced in starting businesses, this guide will serve as a valuable resource to help you learn how to finance a laundry business.

Initial costs of starting a laundromat business

Starting a laundromat business involves several costs before opening, including equipment, location, permits, and other expenses that may arise during the process of establishing your business.

It's important to consider the ways to decrease the initial startup costs associated with a laundry business. One option is a franchise - Laundromat franchisors will commonly help with some of the expenses, in exchange for a piece of your business.


The heart of any laundromat business is its equipment! High-quality, reliable machines are crucial for maintaining customer satisfaction and ensuring repeat business. When budgeting for equipment, consider the following items:

  • Washers: Commercial-grade washing machines come in various sizes, capacities, and efficiency levels. Top-loading and front-loading options are available, but front-loaders are typically more energy-efficient. Prices can range from $3,000 to $10,000 per machine, depending on the make and model.

  • Dryers: Commercial dryers are also available in various sizes and capacities. Gas dryers are generally more energy-efficient than electric dryers, but may have a higher upfront cost. Dryer prices can range from $2,000 to $8,000 per unit.

  • Vending machines: Offering vending machines with laundry detergents, fabric softeners, and other laundry essentials can generate additional revenue for your business. Prices for vending machines can range from $1,000 to $5,000.

  • Change machines: Providing change machines for customers to convert bills into coins is a must for any laundromat. These machines can cost between $1,000 and $3,000, depending on the capacity and security features.

  • Miscellaneous equipment: Other necessary items include card readers, laundry carts, seating, folding tables, and signage. The costs for these items will vary based on your specific needs and preferences.


Blog Frame Templates (5)The right location will be easily accessible, highly visible, and situated within a densely populated area to attract a steady flow of customers. When considering location costs, keep the following factors in mind:

  • Rent vs Lease: Monthly rent or lease payments depend on the size, location, and condition of the space. Research local commercial real estate prices to get an accurate estimate for your area.

  • Renovations and Build-Out: Depending on the condition of the space, you may need to invest in renovations or build-out costs to make it suitable for a laundromat. This may include plumbing and electrical work, installation of equipment, and cosmetic improvements such as flooring, painting, and lighting.

  • Security: Installing security measures such as surveillance cameras, alarm systems, and reinforced doors can help protect your investment and provide a safe environment for your customers. These costs will vary based on the level of security you choose.

Permits and licenses

Operating a laundromat business requires various permits and licenses, including but not limited to:

  • Zoning permits: You must ensure that your location complies with local zoning regulations for laundromat businesses. The cost of a zoning permit is dependent on your municipality's fees.

  • Business licenses: A general business license is typically required to operate a laundromat. Costs will vary based on your location and the type of license needed.

  • Environmental permits: Laundromats may be subject to environmental regulations, such as wastewater discharge permits, depending on the local jurisdiction. Research your area's requirements and associated costs to ensure compliance.


Funding options for a laundromat business

Once you have a clear understanding of the initial costs associated with starting a laundromat business, it's crucial to explore various funding options. Here’s a look into the different financing methods available, including the pros and cons of each to help you make an informed decision.

Traditional bank loans

Banks offer various loan products for small businesses, including term loans, lines of credit, and equipment financing. These loans often come with competitive interest rates and repayment terms, but they may have stricter requirements for credit scores, collateral, and business plans.


  • Bank loans typically offer lower interest rates than alternative lenders, helping you save money over the life of the loan.

  • Additionally, banks may provide a more personalized relationship, offering guidance and support as your business grows.


  • Securing a bank loan can be challenging, as banks often have stricter eligibility criteria and require extensive documentation.

  • The application and approval process can also be time-consuming.

SBA Loans

The Small Business Administration (SBA) offers loan programs to help small businesses win financing. SBA loans are partially guaranteed by the federal government, reducing the risk for lenders and making it easier for small businesses to secure funding.


  • SBA loans often come with lower interest rates and longer repayment terms compared to traditional bank loans.

  • They may also offer more flexible requirements for credit scores and collateral.


  • The application process for SBA loans can be complex and lengthy, and not all businesses will qualify for these loans.

  • Additionally, SBA loans often require a personal guarantee from the business owner.

Alternative lenders

Online lenders and non-bank financial institutions offer various loan products for small businesses, including term loans, lines of credit, and equipment financing. These lenders may have more lenient eligibility criteria and faster approval processes than traditional banks.


  • Grants provide funding without adding debt to your business's balance sheet.

  • They may also offer opportunities for networking and additional support from the granting organization.


  • Competition for grants can be fierce, and the application process can be complex and time-consuming. 

  • Grants may also come with specific requirements or limitations on how the funds can be used.


Platforms such as Kickstarter, Indiegogo, and GoFundMe enable entrepreneurs to raise funds from their personal networks and the broader public. This funding option allows businesses to generate capital while also building a customer base and generating buzz for their product or service.


  • Crowdfunding can help you raise funds without incurring debt or giving up equity in your business.

  • It can also serve as a marketing tool, helping to create awareness and generate interest in your business.


  • Crowdfunding campaigns can be time-consuming and may require significant effort to promote and manage.

  • Additionally, there is no guarantee that your campaign will reach its funding goal, and some platforms require campaigns to reach their target before funds are deployed.

Cents Capital

Capital (1)Cents Capital is a lending arm designed to finance laundry business owners. With a deep understanding of the laundromat industry, Cents Capital can offer tailored financing solutions to meet the unique needs of your business.


  • Our specialization in the laundromat industry enables us to provide customized financing options that align with your business's requirements.

  • We can also help you navigate the financial landscape more effectively, helping you get the most suitable funding option for your needs.

  • Additionally, we offer more flexible terms and faster approval processes than traditional lenders.


  • As a specialized lending arm, we have fewer loan products and options compared to traditional banks and alternative lenders.

By exploring these various funding options and weighing the pros and cons, you can determine the most appropriate financing method for your laundromat business. It's essential to carefully consider your business's specific needs and financial situation to secure the funding necessary for a successful launch and sustained growth.

Download our whitepaper to learn more about Cents Capital


6 tips for securing financing

It’s one thing to research financing options; it’s another to put yourself in the best possible position to secure financing. Financing your laundromat business may seem daunting, but with the right approach and preparation, you can increase your chances of winning the funding you need. Below are some key factors for how to get a laundromat loan with tips for improving your credit score, preparing a solid business plan, and finding the right lender.


1. Understand lender requirements

Before applying for financing, research the specific requirements of potential laundromat lenders. Familiarize yourself with their credit score, collateral, and documentation expectations. By understanding these requirements, you can better prepare your application and maximize your chances of approval.

2. Improve your credit score

A strong personal and business credit score can significantly impact your ability to secure financing. Here are some ways to improve your credit score:

  • Pay bills on time: Establish a history of timely payments by consistently paying your bills before the due date. Late or missed payments can negatively impact your credit score.

  • Reduce debt: Lower your credit utilization by paying off outstanding debt, such as credit card balances. A lower credit utilization ratio can lead to a higher credit score.

  • Check your credit report: Obtain a copy of your credit report and review it for errors or discrepancies. If you find any inaccuracies, dispute them with the credit reporting agency to have them corrected.

3. Develop a comprehensive business plan

A well-prepared business plan is crucial when seeking financing. Lenders want to see that you have a clear vision for your laundromat business and a solid plan for achieving your goals. Your business plan should include:

  • Executive summary: Provide an overview of your business, including your mission statement, objectives, and a brief description of your products and services.

  • Company description: Detail the legal structure of your business, its history, and its unique selling points.

  • Market Analysis: Demonstrate your understanding of the laundromat industry, including target market demographics, competitors, and market trends.

  • Marketing strategy: Outline your plan for promoting your business and attracting customers. This may include advertising, public relations, social media, and other marketing efforts.

  • Operations plan: Describe the day-to-day operations of your laundromat, including staffing, inventory management, equipment maintenance, and other operational aspects.

  • Financial projections: Provide realistic financial projections for your business, including a break-even analysis, profit and loss statement, cash flow statement, and balance sheet. These projections should cover at least three years to demonstrate the long-term viability of your business.

  • Management team: Highlight the qualifications and experience of your management team, emphasizing their ability to execute the business plan and drive the success of your laundromat.

4. Build a strong relationship with lenders

Establishing trust and rapport with potential lenders can increase your chances of securing financing. Be transparent about your business's financial situation, share your successes and challenges, and maintain open communication throughout the loan application process. Demonstrating your commitment to the success of your business can help instill confidence in lenders.

5. Leverage industry expertise

Seek advice and guidance from experts in the laundromat industry, such as consultants or industry associations like the CLA. These resources can provide valuable insights, connections, and support, helping you better position your business for success and increasing your chances of securing financing.

6. Be persistent

Securing financing for your laundromat business may require persistence and patience. Be prepared to face potential rejections and continue searching for the right lender and funding option that meets your needs. With determination and a well-prepared application, you can increase your chances of obtaining the financing necessary to start and grow your laundromat business successfully.


Managing finances for a laundromat business

Blog Frame TemplatesEffectively managing your finances is critical for the long-term success of your laundromat business. Here are some ongoing costs of running a laundromat, various financial management tools and techniques, and advice on managing cash flow and tracking expenses.


Ongoing expenses

Running a laundromat business comes with several ongoing costs that must be carefully managed. Some of these expenses include:

  • Utilities: Water, electricity, and gas expenses are significant for laundromats due to the nature of the business. Monitor your utility usage closely and implement energy-saving practices to minimize costs.

  • Rent or mortgage: Regular payments for your laundromat's location can be a significant expense. Negotiate favorable lease terms or refinance your mortgage to reduce costs.

  • Maintenance and repairs: Regular maintenance of your equipment is essential to ensure reliability and customer satisfaction. Budget for routine maintenance, as well as unexpected repairs that may arise.

  • Payroll: If you employ staff, salaries, benefits, and payroll taxes must be factored into your ongoing expenses. Implement efficient staffing strategies to optimize labor costs.

  • Insurance: Protect your business with proper insurance coverage, including property, liability, and workers' compensation policies. Regularly review your insurance needs and shop around for the best rates.

  • Marketing and advertising: Ongoing marketing efforts are crucial to maintaining and growing your customer base. Allocate funds for online and offline advertising, promotions, and public relations.

Business management tools

Utilize business management tools to help you efficiently manage your laundromat's finances:

  • Accounting software: Invest in reliable accounting software to automate bookkeeping tasks, track expenses, and generate financial reports. Popular options include QuickBooks, Xero, and FreshBooks.

  • Budgeting tools: Create and maintain a detailed budget to help you monitor income and expenses, identify areas for cost savings, and plan for future investments. Use budgeting software or spreadsheets to simplify the process.

  • Cash flow management tools: Cash flow management is critical for any business. Use software or spreadsheet templates to project cash inflows and outflows, ensuring you have enough working capital to cover your ongoing expenses.


The importance of financing to start a successful laundromat business

Choosing the funding option with the greatest number of advantages to your business is one of the most important deciding steps for a promising future for your business. For many, the smartest move is working with a funder that specializes in growing successful laundry businesses. 

With a focus on empowering individuals, businesses, and organizations to unlock their financial potential, Cents Capital offers an unparalleled experience in wealth generation and management. The cutting-edge technology and data-driven strategies enable investors to make informed decisions, optimize their portfolios, and achieve sustainable growth. The team of dedicated professionals, coupled with our commitment to transparency, ensures that our clients receive personalized and tailored solutions that align with their financial goals. 

As you embark on this exciting venture, remember that persistence, determination, and a commitment to learning and adapting are crucial to overcoming obstacles and achieving your goals. With the right financing and financial management strategies in place, you can build a thriving laundromat business that serves your community and provides a strong return on your investment.

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Whether you're financing your first store or expanding your portfolio, download our guide to discover how you can achieve greater profitability with less day-to-day management.