Your Comprehensive Guide to Laundromat Equipment Financing.
Financing a laundromat involves understanding the costs, exploring various financing options, preparing your business plan, and navigating the loan application process. Here’s a detailed guide to help you through this process.
First to create a projection and business so you can understand Costs associated opening a new laundromat shop. If you’re applying for commercial loan, SBA loan or just bank loans, you’ll need the following to be able to show you are serious in your endeavor.
Initial Costs:
- Purchase Price or Lease: Cost of buying or leasing the property.
- Renovation and Setup: Remodeling, plumbing, electrical work, and setting up the space.
- Equipment: Commercial washers and dryers, payment systems, vending machines, folding tables, etc.
- Licenses and Permits: Business licenses, environmental permits, health department permits.
- Initial Inventory: Detergents, cleaning supplies, and other consumables.
Ongoing Costs:
- Rent or Mortgage Payments
- Utilities: Water, electricity, gas, and waste disposal.
- Maintenance: Regular maintenance of machines and premises.
- Staffing: Salaries, if the laundromat is not self-service.
- Insurance: Property, liability, and workers’ compensation insurance.
Exploring Financing Options
Traditional Bank Loans:
- Business Term Loans: Fixed or variable interest rates with a set repayment schedule.
- SBA Loans: Backed by the Small Business Administration, often offering lower interest rates and longer terms. Popular options include the SBA 7(a) and 504 programs.
Alternative Financing:
- Equipment Financing: Equipment Loans specifically for purchasing laundromat equipment, dry cleaning equipment, with the equipment serving as collateral.
- Business Line of Credit: Flexible option allowing you to borrow as needed up to a certain limit.
- Commercial Real Estate Loans: If purchasing the property, these loans can finance the building and land if you want to have your own building rather than renting.
- Franchise Financing: If buying a laundromat franchise, the franchisor might offer financing options.
Other Options:
- Personal Savings and Investments: Using personal funds or getting investments from friends and family.
- Angel Investors and Venture Capital: Less common for laundromats but possible for innovative business models.
- Crowdfunding: Platforms like Kickstarter or GoFundMe to raise small amounts of money from a large number of people.
Preparing Your Business Plan
A well-prepared business plan is crucial for securing financing. It should include:
- Executive Summary: Overview of your business, including your mission statement and the basics of your plan.
- Market Analysis: Research on the laundromat industry, target market, and competitive landscape.
- Business Structure: Legal structure, ownership details, and organizational chart.
- Products and Services: Description of the services you’ll offer, including any unique features.
- Marketing and Sales Strategy: How you plan to attract and retain customers.
- Financial Projections: Detailed income statements, cash flow statements, and balance sheets for at least three to five years.
- Funding Request: The amount of money you need, how it will be used, and your proposed repayment plan.
Navigating the Loan Application Process
- Prepare Documentation: Gather your business plan, personal and business credit reports, tax returns, financial statements, and legal documents (e.g., business licenses, leases).
- Choose the Right Lender: Research potential lenders, comparing interest rates, terms, and their experience with laundromat businesses.
- Submit Your Application: Complete the application process with your chosen lender, providing all required documentation.
- Review Loan Terms: Carefully review the loan offer, including interest rates, repayment terms, fees, and covenants.
- Close the Loan: Sign the loan agreement and fulfill any conditions precedent to disbursement of funds.
Post-Financing Considerations
- Effective Management: Implement robust accounting and management systems to monitor finances and operations.
- Regular Maintenance: Schedule routine maintenance to keep equipment in optimal condition.
- Customer Service: Focus on providing excellent customer service to build a loyal customer base.
- Marketing: Continuously market your laundromat to attract new customers and retain existing ones.
- Growth and Expansion: Plan for future growth, whether through adding new services, expanding locations, or upgrading equipment.
Financing Programs Available from Liberty Capital
Liberty Capital offers a variety of financing programs to suit different needs, including:
- Lease-to-Own Programs: Allows businesses to eventually own the equipment after fulfilling lease terms.
- EQUIPMENT FINANCE AGREEMENT or EQUIPMENT LOAN: Traditional financing with fixed monthly payments and terms up to several years.
- Working Capital Loans: Short-term loans to cover operational costs or down payments on equipment.
- Seasonal Payment Plans: Customized payment schedules to match the seasonal revenue patterns of your business.
- Term Loans: Term loans allows you to have a predictable loan term to 3-5 years.
- Factoring: Capital upfront from your account receivable to cover operational costs or down payments on equipment.
- Commercial Loan: Including SBA 504, we are a commercial loan broker for 4+ unit commercial property needing commercial loans purchase, refi, ground up funding or condo conversation, bridge loans on commercial property, condos and apartments.
- Merchant Cash Advance: Most for unbankable type of borrowers. Pure based on purchase of future revenue. Revenue based loan. Revenue purchase agreement funding.
- Dry Cleaning Financing: As long as your business operates some form of dry cleaning, washer, dryers, they can be considered equipment. We can finance Commercial dryers and commercial washers to dry cleaning equipment, owner and operators can rest assured that you have access to funding across various equipment in the industry.
Benefits of working with Liberty Capital.
Leasing equipment for laundromat or dry cleaning equipment with Liberty Capital offers a practical solution for small business owners looking to manage costs, access tax benefits, and maintain operational flexibility.
Equipment financing can be a complicated process, so you must not do it alone. Working with an equipment loan broker who knows how to package the best approval will only help get you the right financing.
While leasing provides advantages like hedging against inflation and preserving cash flow, it is essential to weigh these benefits against the potential long-term costs and lack of asset ownership. By understanding the full range of financing options based on your company, personal profiles, and financial standing, you can make informed decisions, save time without having to bank hop not knowing the lender you applied at places all does A Credit, but you are a C credit? How would you know? Let the expert do the work for you so you can go back doing what you’re good at, running your business.
We are on your side, your best support for your business’s growth and financial health. Contact Liberty Capital today to explore the best heavy equipment financing options for your business needs.
What you get when you finance your next laundry and dry cleaning equipment with Liberty Capital.
Fast simple online application. No financials up to $250,000. Corp-only (no personal guarantee).
When it comes to leasing equipment, two common types of lease agreements are the Dollar Buyout Lease and the Fair Market Value (FMV) Lease. Here’s a comparison of the two:
Dollar Buyout Lease
Definition: Also known as a $1 buyout lease, this type of lease allows the lessee to purchase the equipment at the end of the lease term for a nominal fee, typically $1, some states requires $101.
Key Features:
- Ownership: At the end of the lease term, ownership of the equipment transfers to the lessee.
- Monthly Payments: Generally higher than FMV leases because the total cost includes the price of eventual ownership.
- Depreciation: Lessee can depreciate the equipment on their taxes since it’s treated similarly to a loan.
- Flexibility: Less flexible in terms of upgrading or returning the equipment before the lease ends.
Ideal For:
- Businesses that want to own the equipment at the end of the lease term.
- Those who prefer consistent, predictable payments.
- Companies that need equipment with a long useful life.
Fair Market Value (FMV) – True Lease
Definition: An FMV lease allows the lessee to use the equipment for a set term with the option to purchase it at the end of the lease for its fair market value.
Key Features:
- Ownership: The lessee does not automatically gain ownership of the equipment. They have the option to purchase it at its fair market value, return it, or renew the lease.
- Monthly Payments: Generally lower than a dollar buyout lease because the cost of ownership is not included.
- Tax Benefits: Lease payments are typically fully deductible as an operating expense.
- Flexibility: Offers more flexibility to upgrade, return, or extend the lease term.
Ideal For:
- Businesses that want lower monthly payments.
- Those looking for flexibility at the end of the lease term.
- Companies that may want to upgrade to newer technology frequently.
Here are the benefits to financing your next laundromat equipment.
- Up to 120% equipment cost
- Up to $5,000,000 with financial statements
- Next-day funding approval
- 12 – 72-month fixed payment terms
- No down payment required for qualified borrowers.
- Lowest Rates in the industry for qualified borrowers
- Eligibility for all new and used equipment financing.
- Will not appear on personal credit reports.
- No early payoff penalties
- Other off-balance sheet financing – Fair Market Value, 10%
- Lease – $1 buyouts.
- Equipment Finance Agreement
How To Apply!
Liberty Capital is committed to helping small business owners acquire the machinery or equipment they need to thrive. So we make it simple for you to apply. Simple Application With flexible financing options, competitive rates, and a deep understanding of the industry, we provide the tools you need to build a successful future. Contact us today to learn more about how we can assist with your heavy equipment financing needs.
What we need to get an approval.
- ONLINE APPLICATION
- Bank Statements
- Invoice or Quotes
*financials and tax returns maybe needed depending on the credit score, time in business and amount of funding request.
Are you buying an existing one? Are you opening a new start up laundromat? Whatever you decide Liberty Capital will assure the process to be quick and simple. Call us today 888-511-6223 or APPLY TODAY.
