SBA loans for laundromats and dry cleaners

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Top SBA Lenders for Laundromats/Dry Cleaners

RankSBA LenderLender CityState# of Loans Avg LoanAvg Rate
1TD BankWilmingtonDE6 $113,33311.7%
2Noah BankMiamiFL5 $298,00011.5%
3Newtek BankMiamiFL5 $298,00011.5%
4Huntington BankColumbusOH5 $494,80010.4%
5M&TBuffaloNY5 $198,40011.9%
6Readycap Lending, LLCBerkeley HeightsNJ3 $2,920,00010.0%

Recent Laundromat Loan Activity

YearQtr# of Loans Avg LoanAvg Rate*
2024129 $783,22110.0%
2023444 $594,74810.6%
2023342 $660,08810.2%
2023232 $696,5389.9%
2023133 $919,5919.2%
2022455 $817,7028.1%
2022325 $1,054,6966.8%
2022235 $915,3515.5%
2022119 $886,2055.4%
2021418 $727,0895.1%
2021353 $821,4875.1%
2021252 $788,9375.3%
2021114 $672,8935.1%

* Note that most SBA loans are variable-rate loans. The rates listed above is the initial interest rate at loan closing. Variable-rate SBA loans fluctuate by the fed funds rate set by the Federal Reserve.

Navigating the Waters of SBA Loans to Acquire Your Dream Laundromat

Imagine this: John, a dedicated worker in a bustling city, always dreamt of owning his own business. Each day, as he passed by the local laundromat on his way to work, he imagined transforming it into a thriving, bustling laundromat that generated enough cash flow to allow him and his family to live comfortably. One day, a “For Sale” sign appeared in the window. This was his chance! But there was one big hurdle: funding the purchase. John discovered the perfect solution – an SBA loan. This is his journey, and perhaps, yours too.

Understanding Laundromat SBA Loans

The Small Business Administration (SBA) offers a variety of loan programs designed to assist entrepreneurs like John in purchasing businesses, including laundromats. These loans are not directly from the SBA but are instead issued by participating lenders and partially guaranteed by the SBA.

Why Choose an SBA Loan for a Laundromat Purchase?

Laundromats are particularly attractive for SBA loans due to their stable revenue model. According to the Coin Laundry Association, the average gross annual revenue for coin-operated laundromats ranges from $30,000 to $1,000,000, with an average of about $5,000 per week. Moreover, laundromats boast an impressive 20-35% return on investment, making them a solid business choice.

Choosing the Right Lender

The landscape of lenders is diverse. From Hanmi Bank’s larger average loans of $1,220,000 to the small, strategic loans from TD Bank averaging $49,975, there’s a fit for every scale of laundromat ambition. Readycap Lending, LLC, for instance, might be your go-to with an average loan size of $2,761,450, perfect for a larger operation, while Citizens State Bank in Hudson, WI could be the choice for smaller ventures with a $350,000 average loan.

SBA Laundromat Loan Eligibility and Requirements

To qualify for an SBA loan, applicants must meet certain criteria:
– Good personal credit score (typically above 680)
– Strong business plan with financial projections
– Relevant management or industry experience
– Down payment (usually 10-20% of the project cost)
– Collateral (though it may not cover the entire loan value)

The Application Process

The process involves several key steps:
1. Find an SBA Lender: Work with an SBA-approved lender. Our Lender Match tool can help you find one.
2. Prepare Your Documents: This includes your business plan, financial statements, personal financial information, and more.
3. Loan Underwriting: The lender reviews your application and assesses risk.
4. Approval and Closing: If approved, you’ll receive loan terms and proceed to closing. The process generally takes 90 – 120 days from bank intro to loan closing.

Financial Considerations

The average SBA loan for business acquisitions ranges from $350,000 to $5 million, with interest rates typically between 5% and 8%. The repayment term can extend up to 10 years for business acquisitions, as noted by the SBA’s official site.

Conclusion: Your Laundromat Dream Awaits

With the right preparation and financial backing through an SBA loan, you can follow in the footsteps of countless successful laundromat owners. Your entrepreneurial journey in the world of laundries is just a well-planned step away.

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References:

  • Coin Laundry Association. “Industry Statistics and Trends.”
  • U.S. Small Business Administration. “SBA Loan Programs.”
  • Eastern Funding LLC. “Case Studies: Laundromat Acquisitions.”