What is Commercial Laundry Equipment Financing?
Equipment financing is when you acquire equipment for your laundromat or dry cleaning company with credit. You can use several types of small business financing to supply your laundry room or dry cleaning business.
The loan amount you can request will depend on your equipment needs and the total project cost, which includes expenses like equipment, leasehold improvements, construction, and other related costs. Up to $500,000 can be secured for laundromat financing without producing financials in some cases; this is typically the maximum loan amount available for a standard loan request, and lenders will consider the total project cost when evaluating your application.
Let’s look at the most common form of financing for laundry facilities:
Equipment Loans
An equipment loan is similar to a traditional term loan, except that the asset serves as collateral. Lenders typically offer higher borrowing amounts with low interest rates and longer loan terms for self-collateralized loans. The repayment terms for loans are generally flexible and long-term in nature. With each payment, the loan balance decreases, and the financed amount is determined based on the equipment cost and the percentage of the project that can be funded.
Qualified companies can typically get:
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Up to $5 million per piece of equipment.
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Interest rates start at 3.5%.
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Loan terms are between 1 and 6 years.
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Funded in 3-10 business days.
Based on your credit and project scope, you can receive an estimated financed amount during the application process, which helps with planning and understanding your loan eligibility.
Many equipment financing brokers can help businesses find the best financing deals. Some lenders may charge a one-time administration fee or application fee after loan closing, which should be factored into the total cost of financing.
SBA Loans for Laundry & Dry Cleaning Equipment Financing
Established laundry businesses, such as laundromats and dry cleaners, with excellent credit, can consider SBA loans for equipment financing. SBA financing is a popular option for purchasing laundry equipment, offering favorable terms for business owners. The SBA 7(a) loan is the most popular SBA loan program.
An SBA 7(a) loan is a type of government-backed loan that helps small businesses obtain funding for various purposes, including purchasing equipment and other business needs. The loan is partially guaranteed by the U.S. Small Business Administration, which reduces the risk for lenders.
SBA 7(a) loans can be used for purchasing equipment, working capital, or business expansion. To apply for an SBA 7(a) loan, you’ll need to demonstrate the viability of your business and your ability to repay the loan.
You must provide financial statements, tax returns, a business plan, and a personal financial statement to apply for an SBA 7(a) loan. SBA 7(a) loans are typically offered through banks, credit unions, and other lending institutions. SBA loans are generally more accessible for businesses with imperfect credit due to the guarantee provided by the SBA.
However, most SBA lenders still require borrowers to have good credit. You need at least a 640 credit score to qualify for an SBA loan. The repayment terms for SBA loans are typically flexible and long-term, making them attractive for financing large equipment purchases.
The loan closing process for SBA financing includes finalizing all required documents and disbursing funds to complete your equipment purchase.
Other Small Business Loans
Several funding services could help you buy commercial laundry equipment. Please note that some loans may require collateral, such as assets or a personal guarantee. Submitting a completed credit application is necessary for most lenders, and some offer a streamlined process with a one-page credit application for faster approval. Providing a complete application package, including all required documents, can lead to immediate feedback or feedback based on your submission, which speeds up credit decisions.
Additionally, they will likely be available for lower borrowing amounts. A minimum credit score of 500 is generally needed to qualify for a loan from an online lender. However, some loans require a higher credit score. The average credit decision for financing is provided within 24 hours.
Here are some loan types to consider:
A business line of credit gives you access to a revolving credit line that can be used to purchase equipment as needed. Personal loans can be used to finance equipment if a business does not qualify for traditional business loans. Established laundry business owners may also be able to obtain funding for a new store purchase.
Equipment Vendor Financing Options
Many equipment manufacturers or distributors offer their own financing options to help businesses purchase or lease equipment directly from them. In-house financing programs are often tailored to specific equipment purchases. Working with a local distributor can help you identify your equipment needs and prepare a complete finance package that includes all costs related to equipment, construction, and project fees.
Vendor financing streamlines the process of acquiring equipment. The financial services department at the distributor or manufacturer can assist in structuring a complete finance package based on your project requirements, including details on loan terms and the application process. Competitive financing terms can be negotiated directly with equipment vendors. Vendor financing options often include personalized support throughout the borrowing process. Flexible payment options are available through vendor financing. Financing options in California require a California financing law license.
How do Commercial Laundry Equipment Loans work?
First, you need an invoice for the laundry machines you’re purchasing. Once you have an invoice, you can apply for an equipment loan with a traditional bank, an online lender, or a lending marketplace. Many businesses prefer financing to conserve cash and improve monthly cash flow. When reviewing the invoice and payment process, consider other costs, such as leasehold improvements and impact fees, as the total project cost includes equipment, installation, improvements, and related fees.
Each lending institution will have a different application process. It would be best to shop around for the best terms and rates when selecting a lending service. Some lenders may require a security deposit as part of the loan or lease agreement, so be sure to clarify this during the application process. Be aware of any additional fees, such as prepayment penalties. It is essential to review all terms to ensure there are no hidden costs. Flexible payment plans are available for qualified laundry companies.
Completing a standard credit application is a common requirement for starting financing applications. Once you apply and get credit approval, the lender sends the money to the equipment merchant for the invoice amount. The lender holds a lien on your title to the laundry machines.
You then make monthly payments for the principal, interest, and fees for the loan term. When you finish paying off the loan, the lender releases the title in your business’s name, and you own it outright. Leasing commercial laundry equipment can allow for fixed monthly payments.
What are the qualifications for Laundry & Dry Cleaning Equipment Financing?
To qualify for an equipment loan through United Capital Source, you need:
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A minimum credit score of 600.
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At least 1 year in business.
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Annual revenue of $250,000 or more.
What are the benefits of Laundry & Dry Cleaning Equipment Financing?
Laundry and dry cleaning equipment can be expensive and often needs to be replaced due to wear and tear. Equipment financing allows you to upgrade equipment at your laundromat, dry cleaner, or laundry business without a significant upfront cost. Equipment financing also provides easy access to the latest laundry technology and funding solutions, making it simple to keep your business up to date.
Laundromat financing options often feature low, competitive rates tailored to fit budgets. Financing can be quick and easy with personalized service for laundromats. Most credit decisions for laundromat financing are made within one business day of receiving a complete application.
Laundromat financing options often feature low, competitive rates tailored to fit budgets. Some financing programs for laundromats require minimal upfront fees or offer 100% financing.
What are the drawbacks of Laundry & Dry Cleaning Equipment Financing?
Financing laundry and dry cleaning equipment helps avoid significant upfront costs, but it comes with drawbacks. The total cost is higher due to interest and fees, making the equipment more expensive over time.
Since laundry technology evolves quickly, financed machines may become outdated before the loan is paid off. Most agreements require the equipment as collateral, and some lenders may also request a personal guarantee, which puts personal assets at risk.
Loan terms can be inflexible, with penalties for early repayment. Additionally, financing typically doesn’t include maintenance, so the business bears repair costs. Taking on this debt can also affect your credit and limit future financing options. It’s essential to weigh these factors before committing to equipment financing for your laundry business.
Laundry & Dry Cleaning Equipment Financing Pros & Cons
Pros:
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No large upfront payment required for new or upgraded equipment
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Ideal for replacing worn equipment or meeting growing customer demand
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Tailored loan options designed for laundromat budgets
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Low, competitive interest rates are available
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Fast approval process—often within one business day
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Some programs offer 100% financing or minimal upfront fees
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Personalized service for laundry and dry cleaning businesses
Cons:
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The total cost is higher over time due to interest and fees
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Equipment may become outdated before the loan is repaid
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Equipment is usually collateral; personal guarantees may be required
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Limited flexibility with loan terms and possible early repayment penalties
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Maintenance and repairs are typically not included
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Can impact your business credit and future financing opportunities
How to Apply for Laundry & Dry Cleaning Equipment Financing:
You can apply for equipment financing through our lender network by following these steps:
Step 1 – Apply online in a few minutes: Use our simple online application to submit a request for business funding. If you need any assistance along the way, please don’t hesitate to contact us by phone, chat, or email.
Step 2 – Get expert advice on loan options: An expert, knowledgeable account executive will walk you through all the fine details and requirements. This is to ensure you have all the info you need.
Step 3 – Finalize your application and get funded: Once your funding has been approved and closed, the lender sends the funds to your account so you can start using them to grow your business.
Frequently Asked Questions
Here are some of the questions about dry cleaning and laundromat equipment financing.
What types of Dry Cleaning and Laundry Equipment can I finance?
The beauty of equipment financing is that you can use it to acquire a wide range of equipment from the top brands. Identifying your equipment needs is the first step in preparing a financing application, as it helps ensure you include the correct machinery in your project budget. If there is a business need for it, you can typically get a loan for all the equipment you need.
Dry Cleaning and Laundry Equipment
Examples include:
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Commercial washers.
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Commercial dryers.
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Coin-op washer & dryer units for self-service laundromats.
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Presses.
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Clothing conveyor.
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Electric boilers.
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Assembly system.
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Hangers, garment covers, and sorting bins.
Ancillary Equipment
Aside from laundry machines, you might need additional equipment to support your business. Examples of ancillary equipment include:
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Point-of-sale (POS) system.
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Information tags.
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Maintenance tools.
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Folding tables.
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Seating units.
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Laundry carts.
Can I Finance Laundry Equipment with bad credit?
Since equipment loans use the asset as collateral, lenders are more willing to work with borrowers with bad credit. While you may be able to obtain a bad credit equipment loan, you might have higher interest rates and fees.
Is it better to Lease or Finance Laundry Equipment?
The decision to finance or lease your laundry equipment comes down to your unique business needs and the durability of the equipment. Leasing offers the option to upgrade equipment at a later time.
Leasing can offer tax benefits, including deductible lease payments. Fixed monthly payments are a common feature of equipment leasing. At the end of an operating lease, the equipment is usually returned without ownership transfer.
Financing makes more sense if you expect to use the machines for an extended period. Leasing makes more sense if you only need them for a short period or believe they’ll go obsolete soon.
Growing Your Laundromat Business with Equipment Financing
Expanding your laundromat business often hinges on your ability to invest in new equipment and technology. Laundromat equipment financing gives business owners the power to make essential equipment purchases—whether it’s upgrading to energy-efficient machines, adding new washers and dryers, or expanding into additional locations—without the burden of a large upfront payment.
With flexible financing options, you can tailor your loan to match your business goals and cash flow needs. Fixed monthly payments make budgeting easier, while competitive rates help you maximize your return on investment. Many equipment financing providers also offer personalized service, guiding you through the process and helping you select the best financing package for your unique situation.
Equipment financing can also help you take advantage of seasonal promotions from equipment manufacturers, allowing you to upgrade your laundromat equipment at the best possible price. By minimizing cash investment requirements, you can preserve working capital for other business needs, such as marketing or hiring staff, and ensure your laundry services remain top-notch.
Ultimately, exploring equipment financing options empowers laundromat owners to make informed decisions, invest in new equipment, and position their business for long-term growth and success. Whether you’re looking to modernize your operations or expand your footprint, equipment financing is a valuable tool for achieving your business objectives.
Laundry & Dry Cleaning Equipment: Final Thoughts
Laundry and dry cleaning equipment costs run high. Whether your company is a coin-operated facility, a commercial operation, or you provide industrial cleaning services, you need the right equipment to do the job.
Equipment loans could be the best solution for dry cleaning and laundromat owners; however, it would be beneficial to shop around and find the right lending partner.
At United Capital Source, we provide competitive rates and fast funding. We offer complete transparency, and our loan experts will provide the best equipment loan amounts, rates, and terms available.
