How Much Money Do You Need to Buy a Laundromat?

If you finance the purchase, plan to bring roughly 10 to 20 percent of the price as a down payment, plus closing costs and a few months of working capital. On an all-cash deal you need the full price plus a reserve. The common mistake is budgeting only for the sticker price and leaving nothing for the first months of ownership.

Contents

• How much cash do you need up front
• Costs beyond the purchase price
• How financing changes the number
• How to size your reserve

How much cash do you need up front

With an SBA or conventional acquisition loan, expect a down payment in the range of 10 to 20 percent of the purchase price. So a store priced at 500,000 dollars typically needs 50,000 to 100,000 dollars down, before other costs. Model your specific deal with the SBA loan calculator, and read SBA loans for laundromat buyers for how the financing works.

Costs beyond the purchase price

The down payment is only part of the cash you need. Budget for:

• Closing costs — loan fees, legal, escrow, and lease assignment costs.
• Working capital — rent, payroll, and utilities for the first few months while you settle in.
• Near-term repairs — any machines close to the end of their life. See how long commercial washers and dryers last.
• Lease deposits — landlords often require a security deposit on assignment.

How financing changes the number

The more you borrow, the less cash you need at closing, but the higher your monthly debt service. That trade-off shows up directly in your return. Use the cash-on-cash calculator to see how the down payment affects your annual return and payback period. A larger down payment lowers risk and monthly payments; a smaller one preserves cash but tightens your coverage.

How to size your reserve

After the down payment and closing, keep a reserve that covers at least three to six months of fixed costs, mainly rent and any payroll. Laundromats are steady, but a major equipment failure or a slow season can strain a thin budget. Once you have a target price range, browse laundromats for sale and run each one through the calculators before you commit. For financing options, see the financing overview and the SBA 7(a) program.