Laundromat business loans explained: which fitout costs lenders fund, how card and coin takings are checked, and how lease and machine age shape the deal.
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Laundromat Business Loans · Fitout Costs · Lease and Machines
A laundromat loan is mostly an equipment deal with a lease attached. This is which cost lines a lender typically funds, how card and coin takings are checked, and how the lease and the age of the machines shape what you can borrow.
Quick Answer
A laundromat can usually be financed, and in most deals the machines carry the loan: washers, dryers and payment systems sit under equipment finance, while goodwill and building works need a business loan or cash. The cost table below shows which lines a lender typically funds and which ones you pay for yourself.
Also called: laundromat finance, self service laundry loan. Same thing, whichever name you search.
Can you get a business loan to buy a laundromat?
You can get a business loan to buy a laundromat, but most lenders split the deal into two parts: the machines, which they can secure and resell, and the business itself, which they mostly cannot. The price of an established laundromat is usually the value of the washers, dryers and fitout plus goodwill, the amount paid for the trading history and the customers who already walk in.
The machines are the easy half. They have serial numbers, a resale market and a dealer who can value them, so they suit equipment finance with the machines as the security. The goodwill half is harder, because a lender cannot repossess a customer base. That part is typically funded with a secured business loan, a directors' guarantee, your own cash, or a mix of all three.
The deposit, contract and goodwill steps that apply to any business purchase are covered in our guide to getting a loan to buy a business. This post stays on what is particular to a laundromat: the cost lines, the takings, the lease and the machines. A laundromat purchase reads most cleanly to a lender when the buyer knows the age and condition of every machine before an offer goes in.
For the wider picture on funding a small business purchase or expansion, start at the Business Owners Hub.
What does it cost to fit out a new laundromat?
Fitting out a new laundromat typically costs somewhere between the low and the mid six figures, and the number moves most with how many machines the site holds and how much plumbing the shop needs. These figures are indicative only and will vary with the site, the machine brand and the state you are in.
As a rough guide, a small suburban site with around 15 to 20 machines might land at approximately $150,000 to $250,000 all in. A larger site with high capacity washers for doonas and commercial loads, plus a full shop fitout, can run to around $400,000 or more. The machines are usually the largest single share of that total, often around half or more.
The rest is the shop itself. Laundromats use a lot of water, hot water and power, so a site that was a clothing store or an office often needs new drainage, gas or a larger electrical supply, extraction fans for the dryers and a floor that copes with water. Then come the payment system, folding benches, seating, lighting, signage and cameras, plus a bond and rent in advance before the doors open.
If the laundromat will run under a new ABN, lenders read the application differently. Our post on equipment finance on a new ABN covers what changes when there is no trading history yet.
Which laundromat costs can be financed, and which need cash?
The machines and payment system can usually be financed against themselves, while the building works, fitout and start up costs mostly need cash or a separate business loan. The dividing line is simple: if a lender could unbolt it and sell it, it is usually fundable as equipment. If it is built into the landlord's shop, it is usually not.
| Cost line | Indicative cost (example only) | How a lender typically treats it |
|---|---|---|
| Commercial washers | Approximately $6,000 to $20,000 each, depending on capacity | Equipment finance, with the machines as security |
| Dryers (gas or electric) | Approximately $5,000 to $15,000 each, more for stacked units | Equipment finance, treated the same way as the washers |
| Card and coin payment system | Around $5,000 to $20,000 for the site | Often financed with the machines when bought from the same supplier |
| Plumbing, drainage and gas | Around $20,000 to $60,000, varies with the building | Rarely funded as equipment; cash or a business loan |
| Electrical upgrade and dryer ventilation | Around $10,000 to $40,000 | Rarely funded as equipment; cash or a business loan |
| Shop fitout, signage and cameras | Around $15,000 to $50,000 | Mostly cash; some lenders include cameras and signage with the machines |
| Bond, rent in advance and opening cash | Varies with the rent and the landlord | Cash or a business loan; never equipment finance |
The bottom four rows are the fitout costs that a lender will not fund on equipment terms. In practice, that is the part of the budget that catches buyers out: they assume the whole fitout can be financed because the machines can, then find they need tens of thousands in cash for plumbing and electrical work that stays with the building.
Machines sourced through the supplier often come with a finance option at the point of sale. Our guide to point of sale finance from equipment suppliers explains how those offers compare with arranging the finance yourself. For the asset side of the deal, see how a chattel mortgage works on business equipment.
How do lenders check laundromat income when takings are card and coin?
Lenders check laundromat income against the business bank statements first, then match them to the payment system reports, because card and coin takings are hard to prove any other way. Money that never reached the bank account does not count, however busy the shop looks on a Saturday.
Card takings are the easy part. Most modern payment systems produce daily and monthly reports by machine, and those reports should line up with the deposits on the statements. Coin is harder. A lender wants to see coin banked regularly and in amounts that make sense against the card share. Gaps of several weeks between coin deposits, or coin that is "used for float", leave a hole in the income the lender can read.
Many laundromats also earn from wash, dry and fold service, and from commercial accounts such as short stay rentals, gyms or salons. Lenders read these as separate income lines. Contracted or regular commercial work helps, but only when it is invoiced and paid into the business account. The same evidence problem applies to any unattended site, and our car wash finance guide covers it in more depth.
If you are unsure how your own records will read, you can check eligibility before you commit to a purchase.
How does the shop lease affect a laundromat loan?
The shop lease sets a ceiling on a laundromat loan, because a lender typically wants the lease term remaining, including any options you can rely on, to run at least as long as the loan. A laundromat cannot move its plumbing to a new shop, so if the lease ends, much of the business value ends with it.
Business Victoria's guidance on understanding lease agreements lists the points to check before signing: how long the lease runs, what renewal options it gives you, how the rent is reviewed, who pays the outgoings and whether you have a right to assign the lease if you sell. Each one matters more than usual for a laundromat.
- Lease term remaining. A short tail on the lease shortens the loan term a lender will offer, which lifts the repayments.
- Outgoings. Water, gas and electricity are among the biggest running costs. Who pays which charges under the lease changes the profit the lender reads.
- Rent review method. A fixed percentage increase is easier to plan around than a market review in a suburb that is gentrifying.
- Make good. Removing machines and plumbing at the end of a lease can be costly, and some leases require it.
- Assignment. If you are buying an existing laundromat, the seller's lease must usually be assigned to you with the landlord's consent.
Lenders will ask for a copy of the lease early. What the assignment clause means for you, and what the landlord can require before consenting, is a question for a solicitor rather than a broker.
How do machine age and replacement cycles change the deal?
Machine age changes a laundromat deal more than almost anything else, because a lender funds each machine over a term it expects the machine to keep earning, and a buyer pays for machines that may soon need replacing. Commercial washers and dryers typically last around 10 to 15 years with good maintenance, varying by brand, load and water quality.
The replacement cycle sets two limits. The first is the loan term: most lenders cap the term so a machine is not too old when the loan ends, and older machines get shorter terms or are declined as security. The second is the price you should pay. A laundromat with a full set of machines near the end of their life is not worth the same as one fitted out three years ago, even if the takings look identical today, because the next owner has a large replacement bill coming.
The strongest laundromat purchases come with a machine list showing the model, the year of manufacture and the service history for every unit, and a plan for which machines will be replaced first. In practice, many owners replace in stages, financing a bank of new washers one year and the dryers a couple of years later, which keeps repayments steady. Lender age limits on second hand machines are covered in our guide to financing used and aged equipment.
What should you check before buying a laundromat?
Before buying a laundromat, check that the profit holds up once the owner's own time, the utility bills and the local competition are counted, because those are the three places a listing most often flatters the business.
- Does "staff free" mean owner unpaid? Someone empties coin boxes, cleans lint filters, clears jams and answers the phone. If that is the seller, put a realistic cost on those hours before you read the profit.
- Do the utility bills match the takings? Twelve months of water, gas and electricity bills should rise and fall with the takings. Bills that look low for the claimed trade are a warning sign.
- What is within walking distance? New apartment blocks without internal laundries help. A new laundromat a few streets away, or a block of new units with laundries, can hurt.
- Are the commercial accounts real? Ask for the invoices and the bank deposits behind any wash, dry and fold or commercial income.
- How is waste water handled? Many councils and water authorities require a trade waste approval for a laundromat. Ask the seller for the current approval and check with the water authority whether it transfers to you or needs a fresh application.
Some sellers will carry part of the price themselves to close the gap a lender will not fund. Our post on vendor finance in a business sale shows how that sits alongside a lender's loan.
A laundromat loan is mostly an equipment loan with a lease attached. The washers, dryers and payment system can usually be financed against themselves; the plumbing, electrical work, shop fitout and goodwill usually need cash or a separate business loan. Lenders read the income from bank statements matched to payment system reports, cap the term by the lease term remaining and the age of the machines, and price the deal on what the next replacement cycle will cost.
Key takeaway: get the machine list, the lease and twelve months of bank statements and utility bills in front of a broker before you make an offer.Frequently Asked Questions
The deposit you need for a laundromat business loan depends on how much of the price is machines and how much is goodwill. Machines financed against themselves can need a small deposit or none for an established borrower, while the goodwill and fitout share typically needs a larger contribution, which varies by lender. Our guide on who funds goodwill when buying a business explains why that share is harder to borrow.
The cost to start a laundry business depends mostly on the number and size of the machines and on how much plumbing and electrical work the shop needs. A new self service laundromat is a six figure project for most sites, and the cost section above breaks the budget into the lines a lender will and will not fund. If the business will run under a new ABN, see how lenders treat equipment finance for a new business.
You can buy a laundromat with vendor finance if the seller agrees to carry part of the price and be repaid over time. It is most often used to cover the goodwill a lender will not fund, sitting alongside an equipment loan on the machines. Lenders will ask to see the terms, so read how vendor finance works before you agree to them.
Laundromats can run without staff at a counter, but they do not run without labour. Someone still empties coin boxes, cleans filters, clears jammed machines and handles complaints, and in many sites that person is the owner, unpaid. A lender reads the profit in the financial statements, so put a realistic cost on those hours before you judge the price.
Used laundromat machines can be financed, but lenders are more cautious with them than with new machines. Most look at how old each machine will be when the loan ends and prefer a dealer invoice or an independent valuation over a sale with no paperwork. Older machines usually mean a shorter term, a larger deposit, or both.
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