How to Use an SBA Loan to Open a Laundromat or Dry Cleaner
February 18, 2025 | Last Updated on: February 19, 2025

Laundromats allow consumers to tackle household tasks on their own time, especially if they live somewhere without shared or individual laundry access. While laundromats aren’t as popular as they once were, there are currently more than 35,000 laundry businesses in the United States, earning a total annual revenue of over $6.7 billion.
If you’re considering opening a laundromat of your own, expanding your existing laundry business, or even buying out someone else’s laundromat, taking out a small business loan can help get you there. One potential option is an SBA loan, which gives entrepreneurs access to the funding they need most.
Here’s a look at how SBA loans for laundromats work, what you can use the funds for, and how difficult it is to get this type of loan.
What Are SBA Loans?
SBA loans are government-backed small business financing options offered by the Small Business Administration (SBA). These loans offer funding to many different types of businesses and once approved, can be used to build a business from scratch, acquire an existing business, fund renovations and upgrades, or even manage cash flow during slow seasons.
SBA loans are backed by the federal government but offered through a variety of lenders including traditional banks, credit unions, online lenders, specialized small business lenders, and more. As they’re secured by the government, they typically boast better loan terms than similar business funding options: this usually means lower down payments, more competitive interest rates, lengthy repayment terms, and more.
There are multiple laundromat SBA loan options available depending on your business needs and eligibility criteria:
- SBA 7(a) loans offer up to $5 million to existing, for-profit small businesses
- CDC/504 loans offer up to $5 million in longer-term and fixed-rate loans, designed for major fixed assets like land, buildings, and certain machinery.
- SBA microloans are available for up to $50,000 and can be used for many different small business expenses, excluding existing debt and real estate.
Though the SBA loan program can be a great laundromat financing option, they aren’t right for everyone. Since these loans are government-backed, the application process is often longer and more in-depth than borrowers expect.
You can expect SBA loans for laundromats to take multiple weeks to complete, if not longer. You’ll also need to provide documentation such as your business licenses, financial statements, and even a detailed business plan.
Why SBA Loans Can Be Beneficial for Laundromat Owners
SBA loans for laundromats can often be a strong match, since laundromats are a small business with stable cash flow potential. Demonstrating this financial strength (along with market projections) in a business plan can help you on the road to approval.
An SBA loan for a laundromat can be used to pay for a wide range of costs, depending on the type of loan you choose. The proceeds from an SBA 7(a) loan, for example, can be used to:
- Purchase land and build a storefront
- Renovate an existing location
- Buy out another owner
- Purchase equipment such as washers, dryers, change machines, soap vending machines, and more
- Provide working capital and cover cash flow needs while you get your business up and running or make it through a slow season
- Refinancing existing business debt
- Hire staff
All of these make SBA loans a great choice for both established laundromats and those just starting. SBA loans for laundromats are also less risky than traditional financing options, so borrowers may be able to qualify for one of these loans when they would otherwise get denied by another lender.
SBA Loan Requirements for Laundromats
No matter what type of business owner you are, you can expect the SBA loan application process to be a bit more involved than some other traditional lenders. While SBA loans for laundromats can offer funding to new business owners, existing entrepreneurs and those with a strong business plan will have the best luck.
To qualify for an SBA loan, your laundromat will need to:
- Meet minimum business credit score requirements (your personal credit score may also be considered)
- Demonstrate strong financial health and history (bank statements, previous tax returns, etc.)
- Provide a minimum down payment and/or collateral to secure the debt
- Meet specific revenue and/or cash flow requirements
- Offer a personal guarantee and/or collateral
Because laundry services typically generate consistent revenue, laundromats may find it easier to qualify for an SBA loan than other types of comparable small businesses.
The Application Process for SBA Loans
SBA loans can take time to process — anywhere from a few weeks to a few months — so be sure to start early and have patience. The better prepared you are before applying, the more comprehensive your application will be and the sooner you can be on your way to the business funding you need most.
Prepare financial documents
Potential SBA lenders will want to see your business (and sometimes personal) tax returns for the last few years. They will frequently also ask for your business’s balance sheets, income statements, bank statements, profit & loss (P&L) statements, and more.
Be sure to gather all of this paperwork safely and have copies ready to upload when you’re ready to apply. If you’re attempting to use this loan to buy a laundromat from someone else, you may need to work with the current owner to acquire and share this documentation with the lender.
Match with a lender
Rather than applying directly with the Small Business Administration, SBA loans for laundromats are offered through partner lenders that best match your loan needs and even your industry. There is a lender match tool on the SBA website that can give you a list of the best SBA lenders for your specific needs. These lenders might be banks, credit unions, online lenders, and specialty small business lenders.
Complete the SBA loan application
Once you’ve found the right lender(s), it’s time to start your application. As part of this process, your potential lender will want to see your business plan and financial projections, a proposed loan amount, any relevant industry history, and an idea of how the funds will be used.
You may need to provide collateral to secure your loan and even a personal guarantee, especially if you’re borrowing a large amount, your business is newer, or you have a limited (or poor) credit history.
Loan approval and disbursement
Your potential lender may want to discuss your application and request additional documentation. Many lenders have portals where you can track your application’s progress, upload supporting documents, ask questions, and more. Expect this application process to take multiple weeks (if not months) to complete. If you need assistance or have concerns, consult an SBA expert or loan advisor.
If your SBA loan for a laundromat is approved, you’ll be notified by the lender. Depending on the type of SBA loan you choose, you may be asked to pick a loan repayment term (7a loans have a term of 60 months, for example) and sign your promissory note. Then, you’ll be scheduled for disbursement.
Alternatives to SBA Loans for Laundromats
Not sure if an SBA loan for laundromats is right for you and your laundry business? There are many other funding options to consider.
- Traditional bank loans: Traditional small business loans generally have lower limits than government-backed SBA loans but can often be approved quickly. Interest rates may be higher than SBA loans, as well, though you may not need to provide as much documentation.
- Equipment financing Laundromat owners can use equipment loans to purchase the necessary machinery to start up their business, especially if they plan to offer dry cleaning or other machinery-based services. Equipment loans are secured by the physical asset they’re used to buy, so eligibility criteria can be more flexible, and interest rates may be lower.
- Short-term business lending: You may find yourself needing cash just to cover an unexpected expense or unplanned dip in cash flow. In this case, a small business loan or line of credit could be the answer to get you the short-term cash you need fast.
Final thoughts
An SBA loan can give you the funding you need to buy a business, renovate your company, or start a brand-new laundromat or dry-cleaning business. For entrepreneurs, these SBA loans for dry cleaners and laundromats offer affordable financing, long-term repayment options, and the flexibility to use your loan funds in a variety of ways to support your business growth.
Whether you choose an SBA 504 loan, a 7(a) loan, or even an SBA microloan, be sure to spend some time on the SBA website learning more. This will help you be as prepared as possible before submitting your application and can even help match you to potential lenders that would best meet your borrowing needs.
FAQs on SBA Loans for Laundromats
Can you get an SBA loan to buy a business from someone else?
Some SBA loans can be used to purchase an existing laundromat, dry cleaner, or other business from someone else. The proceeds can also be used to renovate, update, market, or even hire for the business after you take over.
What disqualifies you from getting an SBA loan?
You’ll find it difficult to qualify for an SBA loan if you have a poor credit history, no (or poor) business plan, or insufficient collateral to secure the loan. You also won’t be eligible if you live outside of the U.S. or if your business falls into the category of “non-eligible businesses.”
What credit score is required to get an SBA loan for a laundromat?
Each SBA lender sets its own specific loan eligibility requirements, though most will expect you to have a credit score of 615 or higher to qualify. Some lenders may be willing to accept a lower credit score in exchange for a larger down payment, additional collateral, or other trade-off.
Do I need a down payment for my SBA loan?
Yes, SBA 504 loans and SBA 7(a) loans each require a down payment, starting at 10%. You may be required to put even more down depending on factors like how much you’re borrowing, your credit score and business history, and your business’s cash flow.
How much can I borrow with an SBA loan?
SBA loans offer as much as $5 million to small businesses. Depending on the type of loan you choose, these funds can be used to purchase real estate, build or renovate a property, purchase equipment, hire employees, market your business, cover cash flow deficits, and more. The amount you’re personally able to borrow will depend on your business’s cash flow, your credit history, collateral, down payment, and other factors.