The SBA 7(a) loan is the most common way buyers finance a laundromat. Enter the price, down payment, rate, and term to estimate the monthly payment, the cash you need to close, and the debt-service coverage a lender will check.
SBA loan payment calculator
Model monthly payments and debt-service coverage on an SBA 7(a) style acquisition loan.
Monthly payment$6,882
Down payment$90,000
Cash to close (down + closing)$105,000
Loan amount$510,000
Annual debt service$82,580
DSCR (cash flow ÷ debt service)1.82x
Total interest over term$315,802
Comfortable coverage
The store's cash flow covers the loan payment with room to spare, the kind of coverage lenders like to see.
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This is an educational estimate, not financial advice or a formal valuation. Confirm all figures with the seller's records and your own advisors.
How SBA financing works for a laundromat
Most laundromat buyers do not pay cash. They use an SBA 7(a) loan, which is a bank loan partially guaranteed by the government so the lender can accept a smaller down payment and a longer payback. You put in an equity injection, borrow the rest, and repay a level monthly amount over about ten years. The whole deal hinges on one question the lender will ask first: does the store's cash flow comfortably cover the payment?
Key takeaways
Plan for a 10 to 20 percent equity injection, plus closing costs.
Lenders want a DSCR of at least 1.25x, and more is better.
A longer term lowers the payment but raises total interest.
Keep a working-capital reserve on top of the cash to close.
How much down payment do you need?
The equity injection is commonly around 10 to 20 percent of the project cost, and it varies by lender and by how risky the deal looks. A store with clean books, a long lease, and an experienced buyer can lean toward the low end. Thin records or a first-time operator push it up. Remember that the down payment is not the whole cash requirement, closing costs and reserves come on top.
What DSCR do lenders want?
Debt-service coverage ratio is the single number that decides most SBA applications. It is the store's annual cash flow divided by the annual loan payment. Clearing the bar is not the same as clearing it comfortably:
How lenders read DSCR. Most want at least 1.25x, but a store that only just clears the bar leaves little cushion for a slow month.
The cash you need to close, and to keep in reserve
Cash to close is the down payment plus closing costs, the money you hand over on day one. The mistake buyers make is stopping there. A laundromat has payroll, rent, and utility bills that do not wait, and equipment that can fail in your first month. Hold a working-capital reserve separate from the purchase so a rough opening stretch does not put you behind on the loan.
Fixed versus variable SBA rates
Most SBA 7(a) loans carry a variable rate tied to the prime rate plus a lender spread, within SBA caps. That means your payment can move if rates do. The rate field here is illustrative so you can model scenarios; confirm the current figure with an SBA-preferred lender, and stress-test a higher rate before you commit to a payment that only works at today's number.
Common mistakes to avoid
Budgeting only the down payment and forgetting closing costs and reserves.
Borrowing against cash flow the seller cannot document.
Accepting a DSCR that barely clears 1.25x with no cushion.
Modeling only today's rate on a variable-rate loan.
Frequently asked questions
How much down payment do you need for an SBA laundromat loan?
The equity injection is commonly around 10 to 20 percent of the project cost, though it varies by lender and deal. On top of the down payment you also need closing costs and a working-capital reserve, so plan for more than the down payment alone.
What DSCR do SBA lenders want?
Lenders generally look for a debt-service coverage ratio of at least 1.25x, meaning the store's cash flow is at least 1.25 times the annual loan payment. A higher ratio gives more cushion and makes approval easier.
Are these the exact SBA rates?
No. The rate field is illustrative so you can model payments. SBA 7(a) rates are variable and tied to the prime rate plus a lender spread within SBA caps, so confirm the current figure with an SBA-preferred lender.